KOLKATA (miningweekly.com) – The Steel Authority of India Limited (SAIL), the country’s largest steel producer, would start construction of a $748-million iron-ore project in the eastern Indian province of Jharkhand, after securing the forest and environmental approvals from the concerned Ministry.

The Forest and Environment Ministry approved the diversion of 636 ha of forest land for mining, paving the way for expansion of the Gua mines and increasing capacity to 10-million tonnes a year from the existing 2.4-million tonnes a year, a senior SAIL official said.

The mine had been in production intermittently since 2011, when its environmental clearance approvals expired and SAIL was forced to suspend operations. Last year, the steel producer was able to resume production after receiving a temporary environmental clearance from the Forest and Environment Ministry.

The expansion of Gua mines, with estimated reserves of 142-million tonnes, was now firmly back on the rails and expansion work would start within the next few months, the official added.

Dogged by delays in securing mandatory approvals, SAIL in November approached the Project Monitoring Group, headed by the Indian Prime Minister, seeking the speedy clearance of the mining project, as it was critical to the supply of raw material to the expanded steel capacities of various steel mills operated by the company.

SAIL had targeted completion of a techno-economic feasibility report and the appointment of a mine developer-operator by October 2012, but missed the deadline, as the Forest and Environment Ministry had opposed expansion of mining operations across the Saranda forests owing to its biodiversity and the displacement of local tribal population.

Expanded iron-ore production from Gua mines was linked to SAIL's Durgapur Steel Plant (DSP) and IISCO Steel Plant in the neighbouring province of West Bengal.

SAIL has completed expansion of DSP from 1.6-million tonnes a year to 2.12-million tonnes a year and planned a joint venture with Kobe Steel, Japan for a 500 000 t/y nugget plant at DSP, including a pelletisation plant for processing iron-ore fines from the Gua mines.