SAIL's Bhilai Steel Plant is set to get temporary relief from looming uncertainty over raw materials.
The Chhattisgarh Government and the Centre have planned to allocate an iron ore block with an estimated deposit of around 80 million tonnes.
Bhilai plant, which currently needs 9.5 mt of iron ore a year, is facing dual problem of captive sourcing iron ore -- dwindling of reserves at its Dalli-Rajhara mine in Chhattisgarh as also lack of progress in developing Raoghat deposit in the State.
According to SAIL sources, the proposed allocation of a block within unexplored Eklama iron ore complex area will help BSP tide over the iron ore linkage problem for a few years before the Raoghat asset could be made operational. Eklama complex is expected to yield high-grade hematitic iron ore. Geological studies have discovered 39 ore occurrences with a total 200 mt and of a grade containing 65 per cent Fe.
Last week, SAIL signed an MoU with Chhattisgarh Mineral Development Corporation Ltd (CMDC), a Chhattisgarh state public sector undertaking for jointlly developing Eklama iron ore deposit, located some 85 km from Bhilai. The deposit is located in Kabirdham district of the State.
A joint venture is proposed to be formed between CMDC and SAIL for the purpose. SAIL has also undertaken to carry out developmental and welfare activities for the neighbouring areas of Kabirdham and Rajnandgaon districts.
SAIL also operates Nandini limestone and Hirri dolomite mines in the State to feed its Bhilai unit.
For the proposed Rs 3,000 crore iron ore mine project, SAIL will have to invest in railway infrastructure connecting the deposit area with the Howrah-Mumbai main railway line.
SAIL will set up ore processing, beneficiation and pallet plants along with the construction of road between Sahaspur-Lohara and Eklama.