Anglo-Australian mining giant Rio Tinto proposes to jointly invest up to $2 billion with local partners in developing iron ore mines in Odisha over the next few years.

Rio Tinto has, over the past two years, renegotiated an agreement with OMC to develop and mine three iron ore deposits in Keonjhar district of Odisha.

“We expect to finalise the agreement in the near term,” said Dr Nik Senapati, Managing Director, Rio Tinto India. Rio Tinto owns 51 per cent stake in the joint venture in which Orissa Mining Corporation (OMC) and NMDC have 44 per cent and 5 per cent stake each.

Waiting for nod

The proposed agreement is awaiting the go-ahead from the Odisha Chief Minister, Mr Naveen Patnaik. As part of the renegotiated pact, the Rio Tinto joint venture will sell iron ore to domestic steel firms, Dr Senapati said. Rio Tinto will bring in its expertise in exploration, sustainable mining and beneficiation practices to develop the ore bodies owned by OMC.

“We are looking at a scale of between 5 million to 25 million tonnes per annum in the long term,” Dr Senapati told a group of visiting journalists. Total investments could go up to $2 billion with each joint venture partner investing in proportion to their holdings.

The joint venture Rio Tinto Orissa Mining Company Ltd was set up way back in 1995-96, but it could not make any headway for various reasons. The initial agreement was focussed on iron ore exports from India and included development of a rail line and port in Odisha.

If the renegotiated agreement goes through, it could be the single largest investment in Indian iron ore mining. With the domestic steel industry witnessing huge capacity addition, Rio Tinto is bullish on the Indian market for iron ore. The joint venture would look at blending of iron ore to meet the industry requirement.

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