KOLKATA (miningweekly.com) – Threats to contractors, blockades and destruction of construction vehicles by an armed opposition group would delay the development of the Rowghat iron-ore mine in the central Indian province of Chattisgarh by at least two years.
Four months ago, Steel Authority of India Limited (SAIL), the country’s largest integrated steel producer, began work on development of Rowghat, where iron-ore reserves are estimated to be 500-million tons. SAIL unveiled a $671-million investment plan designed to build a mine capable of producing 14-million t/y from 2015.
But in light of two months of violent opposition spearheaded by a left-wing group, which controls large tracts of inhospitable and forest areas of Chattisgarh, it was now unlikely that SAIL would be able to operationalise the mine before 2017.
The delay was a major setback to achieving raw material security for SAIL’s Bhilai Steel Plant (BSP), also in Chattisgarh province, where production was being expanded from 3.7-million t/y of hot metal to 6-million t/y.
The plant was currently fed by the company’s mines at Dalli-Rajhara, which supplied 9-million t/y of ore. But reserves were fast depleting and were, thus, only expected to last for another three to four years at the most.
As contingency, SAIL has now decided to ensure the accelerated development of the Chiria iron-ore reserves in the neighboring province of Jharkhand and start first-phase production by 2014. SAIL had undertaken the development of the estimated 1.8-billion-ton reserves at Chiria at an investment of $754-million.
The steel producers estimated that the Chiria mines, when fully operational, could supply around 40% of the company’s total projected ore requirement of 100-million tons.
In the first phase, to be completed by 2015, SAIL would invest $386-million to produce 7-million t/y of iron-ore from Chiria.
“We were always aware that development of Rowghat would be a social and political challenge. Therefore we had planned for a longer gestation period than normal. But even that may not be achieved in absence of the required security apparatus,” a SAIL official said.
“We sought paramilitary forces for dedicated security to the project, but the level of security provided was not sufficient. The provincial government has promised to set up a committee to review the security requirement but still the project would not be able to meet scheduled production date,” an official said.
A 45-km extension of the rail link to the existing mine at Dalli-Rajhara to Rowghat had also been scuttled as contractors from Indian Railways had been prevented from surveying the site.
The Indian army was setting up a jungle warfare training facility in Chattisgarh, but provincial government officials said that the army would not be directly involved in combating the opposition in the area. However, logistical and training support would be offered to the paramilitary, which could improve the security environment surrounding the Rowghat project.