December 02, 2008

SAIL gets PM support on Chiria iron ore mines

PTI reported that Dr Manmohan Singh prime minister of India has assigned Chiria mines to Steel Authority of India Limited and has suggested to the Jharkhand government to ensure the same.

The report cited a government source as saying that "In a letter to the Jharkhand government, the Prime Minister is understood to have suggested that it should expedite allocation of the mines to Steel Authority of India Limited, at the earliest to safeguard its interest. The Prime Minister has asked the state to immediately allow SAIL access to 1 billion tonne of iron ore and for the remaining 1 billion both SAIL and Madhu Koda government could strike a separate deal to allow the PSU to mine the mineral to meet its capacity expansion in Bokaro."

SAIL already enjoys the support of the union steel ministry over ownership on 2 billion iron ore mines. A top steel ministry official said that "Even Mr Ram Vilas Paswan union steel minister had also said that 2 billion tonnes be given to SAIL and the remaining, if any, be kept for the private players. He has opposed sharing of iron ore from the mines as that could be prejudicial to the long term interest of SAIL."

SAIL through its merger with IISCO last year had won the mining rights to three of the 6 blocks in Chiria while the remaining 3 are sub judice in Jharkhand High Court. Following cancellation of leases by the state government, SAIL approached the Mining Tribunal, which subsequently asked the state to revoke the cancellation. SAIL and the state government are now fighting the issue in court. Meanwhile, the centre has initiated efforts to evolve an amicable solution to the imbroglio and steel ministry officials have held talks with state government officials for a possible out of court settlement on the issue.

SAIL is carrying out modernisation of its Bokaro Steel Plant and has also proposed to set up a 10 million tonne Greenfield steel project near it.