KOLKATA (miningweekly.com) - The newly created Indian province of Telangana has stepped up scouting for iron-ore reserves to ensure the location of a three-million-tonne-a-year greenfield steel mill within its own geography.
The province has identified 240 km2 and handed it over to the Geological Survey of India (GSI) for survey and assessment of possible recoverable iron-ore reserves.
However, fearing that possible reserves within Telangana might not be sufficient to ensure raw material security to any proposed steel mill, the provincial government was also scouting for reserves in the neighbouring provinces of Chhattisgarh and Jharkhand with an eye to joint venture with these provincial governments.
“As a newly created province, it is necessary to step up industrialisation of Telangana and the provincial government is convinced that a greenfield steel mill would not only have an economic multiplier impact on the region but also catalyse the province into a manufacturing hub,” a senior government official said.
At the heart of the rush for raw material was a tentative proposal for setting up a three-million-tonne-a-year steel mill by government-owned and operated Steel Authority of India Limited (SAIL).
While SAIL had in principle agreed to locate the steel plant at Bayyaram in Telangana, it had laid down a precondition that the provincial government make available iron-ore reserves that would ensure minimum iron-ore supplies of 20-million tonnes a year for at least 30 years.
The government official said that the present roadblock was that existing iron-ore reserves in close proximity were estimated at only around 200-million tonnes, which would not meet the condition laid down by SAIL.
The Telangana government had roped-in coal miner Singareni Collieries Company Limited (SCCL), headquartered in the region, to undertake iron-ore mining in case reserves were established by the ongoing survey, the official added.
SCCL, GSI and the Indian Railways had been asked to coordinate efforts to guarantee every aspect of raw material supply from survey, assessment of recoverable reserves, mining and transportation, to facilitate SAIL taking a final call on the location of a steel plant in Telangana.
Preliminary work done by the Telangana Mineral Development Corporation indicated that total iron-ore reserves within the province could be around 300-million tonnes, but unless this was established as adequate quality, recoverable reserves SAIL would not be able to take a decision on plant location nor establish the economic viability of the investments.
The option for constructing the steel plant based on imported iron-ore was also on the cards but no discussions on the issue had taken place yet between the various stakeholders, the official added.