JSW Steel to Surrender Nonviable Gonua Iron Ore Mine in Odisha
Express News Service reported that JSW Steel has offered to surrender one of the four iron ore mines it bagged through e-auctions last year at steep premiums. In its August 11 surrender notice to the Director of Mines, the steelmaker has expressed its inability to operate Gonua iron ore mines in Sundargarh district due to low grade ore and logistics problems. JSW Steel wrote "We intend to surrender the entire area of Gonua iron ore mining lease under Rule-21 of Mineral Concession Rules, 2016 with effect from August 12, 2022 and we will submit the final mine closure plan before IBM. The mining operation has become economically unviable due to high shale in bottom benches, low grade mineral in top benches and serious logistic issues due to space constraint.”
Gonua iron ore block is a working mine with an estimated reserve of 118 million tonne. In an aggressive bidding, JSW Steel emerged the preferred bidder for Gonua iron ore block with an offer to pay a premium of 132%. JSW had executed the mining lease deed on June 27, 2020 and commenced mining operation on July 1, 2020. The company is learnt to have paid stamp duty of INR 110 crore for Gonua and a performance guarantee of about INR 50 crore.
Sources in the mining industries said JSW may give up its right to Jajanga iron ore block for reason similar to Gonua.