Steel Authority of India Ltd's Bhilai Steel Plant (BSP) has identified 19 million tonnes (mt) of untapped iron ore deposits within its existing mine lease area of Dalli-Rajhara complex in Chhattisgarh.

BSP has also taken up two projects to put its huge stockpile (8 mt) of fines to productive use.

A top BSP official told Business Line that at Dulki Kalwar Nagpur, spread across three districts – Durg, Rajnandgaon and Kanker – drilling exercises suggested ore deposits of 8 mt. BSP has completed environmental studies in these areas and the public hearing is on currently.

At Rajhara and Jharandalli, reserves of about 11 mt have also been found. Preparation for mining this deposit has also been initiated.

These new finds are important for BSP's near-term raw material security as resources of Dalli-Rajhara open cast mine complex are estimated to last only for six years.

BSP's raw material supply in the near future looks uncertain as Rowghat, its new ore lease, remains out of bounds and the slow-moving work on building railway infrastructure has also stopped a month ago.

The Chhattisgarh Government in the past one year failed to penetrate resistance put up by Maoists in Rowghat.

BSP received the environment and forestry clearance for Rowghat in mid-2010. But, the State Government could not even start the process of clearing uninhabited forest before handing over the 830-acre lease land.

Railway Vikas Nigam Ltd, which is building a 42-km railway line that will bring ore from Rowghat to Bhilai, could only develop land of around 25 km so far. RVNL contractors have stopped work after an armed attack last month.

Expansion programme

BSP, meanwhile, is nearing completion of its Rs 20,000-crore capacity expansion programme, which solely relies on supplies from Rowghat. The lease area has indicated reserves of 550 mt of prime quality iron ore. By December 2012, BSP is likely to increase its hot metal capacity to 7.5 mtpa (now 4.6 mt) without matching ore supplies.

Fines utilisation plans

BSP has decided to put up a 1.2 million tones per annum (mtpa) fines beneficiation unit at a cost of Rs 130 crore. The project would be set up by an outsider on build-own-operate basis.

SAIL's Centre of Engineering & Technology as consultant for the project will design the plant and prepare the tender documents for the BOO contract. The unit is scheduled to be operational in 32 months from now. BSP was currently negotiating with Mecon for preparation of a feasibility study and a detailed project report on the proposed 1.2-mpta unit for pellets from fines, the official added. BSP plans to start work for the Rs 700-crore pellet plant next fiscal.

For improving ore production as well as quality at its operating iron ore mines, BSP is replacing four ore processing equipment and installing a 1000 tonnes per hour dry screen circuit at a cost of Rs 9 crore.