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Jayanta Mallick

Iron-ore mining rights issue has not been sorted out, say sources

Kolkata , July 8

After nine months of waiting futilely to get the proposed 12-million tonne and Rs 40,000 crore steel project off the ground, Arcelor-Mittal has dropped the idea of Jharkhand as a location for all practical purposes. Highly placed sources in the company told Business Line over phone from London that the "deal is off." However, Mr Sanak Misra, the Arcelor-Mittal chief for the India project said that a final decision was yet to be made.

The Jharkhand Government has not been able to sort out the iron ore mining rights issue, Arcelor-Mittal sources said. "The State Government has done nothing in the last nine months regarding identification of land for ore mining with proven reserves", a company source maintained.

No response

The State Government has not even responded to Arcelor-Mittal's request last month for a comfort letter over the proposed project. The then Mittal Steel and the Jharkhand Government had signed a MoU on October 8, 2005 for mining and steel making operations in the State.

Mr Madhu Kora, the Jharkhand Minister for Mines and Geology, said that the Government had not responded to the request for comfort letter simply because Arcelor-Mittal had "not applied for iron ore mine lease so far".

The MoU with the then Mittal Steel had envisaged clearance of the project within 24 months from date of signing. Mittal had also proposed to set up a mega power plant of 2,500 MW capacity and related townships for its employees.

The detailed project report could not be prepared by Mittal in the absence of any assurance regarding raw material supplies. The first phase of the project was slated to have been completed within 48 months following the DPR approval, and the second phase within a further 54 months.

Iron ore reserves

Sources close to the development said the Jharkhand Government has neither been able to assess the iron ore reserves with the help of Mineral Exploration Corporation, an outfit under the Union Mines Ministry, nor has it finalised its rehabilitation policy for the proposed steel projects.

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