SAIL to pump Rs 10k crore to double mining capacity by FY16

 Bolani: Steel Authority of India Limited (SAIL) has lined up an investment of Rs 10,284 crore to double capacity of its captive iron ore mines to 45 million tonne. The plan is in tune with work to increase hot metal capacity by 2015-16. The company is also looking at a further hike in capacity to 56 million tonne by 2019-20, making it perhaps, one of the largest iron ore mining operations in the country.

The biggest chunk of the investment, a total of around Rs 6,500 crore, has been earmarked for the company's Rowghat mines in Chhatisgarh and on the Gua mines in Jharkhand. SAILBSE 0.46 % has decided to spend Rs 3,500 crore on Rowghat, a prized Greenfield property which has faced Maoist threats but is critical to serve captive needs of its Bhilai Steel Plant.

"The Centre has agreed to deploy five battalions of CRPF and BSF personnel to tackle any possible security threat in the area. The deployment has already started and we hope to start production within the next 2-3 years. To start with, Rowghat will produce 7 mt of ore which is slated to go up to 15 mt. As per standard international practice for such large scale mines, we have decided to appoint a mine developer and contractor (MDO) for those mines. We are now in the process of inviting global bids for it," SAIL chairman C S Verma said. The second major portion of SAIL investment in the mines, around Rs Rs 3,000 crore, will be on Gua mines, where SAIL is setting up a 4 million tonne pellet plant and a 10 mt beneficiation unit to cater to the needs of IISCO Steel Plant at Burnpur.

Outlining the company's massive mining expansion plans, Mr Verma said: " We are taking all necessary steps to ensure our raw material security from captive sources in sync with our plans to commission an expanded hot metal capacity of 23.46 million tonne against 13.82 mt. SAIL is sepdning some Rs 72,000 crore on expansion and modernisation of its plants. Post expansion, SAIL would require 39 mt of iron ore. While SAIL has a present capacity to produce 29 mt, the company's production of iron ore touched 23 mt in 2011-12." Mr Verma was speaking to the press after a tour of the company's mines in the eastern region.

SAIL's strategy to raise its mining capacity is being executed in two parts. This includes enhancing capacity of its captive mines at Bolani, Kiriburu and Meghahatuburu and Gua as well as development of new mines at Chiria, Taldih and Rowghat. While the company is spending Rs 1,091 crore to raise mining output at Bolani to 10 mt from 4 mt at present, the company is spending Rs 900 crore each at Kiriburu and Meghahatuburu to enhance capacity to 5.5 mt and 6.5 mt against existing levels of 4.2 and 4.3 mt respectively. The mines mainly serve SAIL's Durgapur Steel Plant and the Bokaro Steel Limited.