Essar, Jindal vie for SAIL’s Rs 9,500-crore ore fines

Banking on upswing Govt-owned steel major to float global tender for 2 MT pellet plant in Jharkhand’s Gua mines

Essar Steel, Jindal South West and Bhushan Steel are in the race for acquiring 35 million tonne of accumulated iron ore fines worth a whopping Rs 9,500 crore at Steel Authority of India Ltd’s (SAIL’s) Gua mines in Jharkhand. The mountains of ore fines have an average iron content of 60 per cent.

SAIL will soon float a global tender to set up a 2 million tonne pellet plant in the region. The company that wins the bid will set up the plant to produce 1.4 million tonne of pellets. SAIL intends to utilise these primarily at its Bhilai steel plant.

The government-owned steel major is exploring two options to utilise these fines accumulated since 1957. One of them is to set up a pellet plant on its own and the other is to strike a barter deal with another company that will set up the plant. “We on our part will provide fines and get pellets in return in a specified ratio,” said Gua and Manoharpur Mines general manager P C Tibrewal. “We have excess iron ore fines with us right now but intend to utilise all the fines produced in our mines within the country as soon as possible.”

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SAIL had floated an expression of interest (EoI) for the same in the past but did not elicit much response. But, now, given the upswing in the steel industry and the lack of captive ore reserves, companies are keen to bid. “We have evinced interest in the proposal and are waiting for further information,” an Essar Steel spokesperson said.

The mines in the region that earlier belonged to IISCO were set up in 1919 and are the oldest mechanised ones in the country. Currently, SAIL produces 2.4 million tonne of iron ore from these mines and intends to ramp it up to 4 million tonne by 2010. Current reserves of the mines stand at 143 MT.

SAIL has been rapped in the past by CAG for not utilising these fines and bottling up reserves at the mines. In its report last year, the CAG had noted that these iron ore fines represents an environmental hazard in Jharkhand and it is economically feasible to supply the iron ore to SAIL’s Bokaro and Durgapur steel plants which have sinter units.

SAIL is also planning to re-float a tender to appoint a consultant for setting up pelletisation and beneficiation plants for its neighbouring Chiria mines. The PSU had floated a tender for that earlier and only Kolkata-based M N Dastur and Co, and Canadian mining and metallurgy consultants Met-Chem had evinced interest for the same. SAIL is ramping up its mining operations in Chiria from the existing 1.2 MT to 7.5 MT by 2010 and ultimately to 15 MT.