Stand off between J'khand govt, Mittal over Chiria

Ranchi, Feb 25: If the latest developments following the fresh initiatives between the Jharkhand government and steel major Mittal Arcelor group are any indications, then the rigidity taken so far by both the groups over the contentious Chiria mines might thaw, paving way for setting up of 12 million-tonne steel plant for which the MOU was signed in 2005.

The steel giant, which had been setting its eyes rivetted at the Chiria mines, the largest iron reserves in Asia, for its proposed Rs 40,000-crore green field project, had earlier said "no" to the government's offer for an alternate mine.

In a significant assertion by Chief Minister Madhu Koda during his recent New Delhi tour that the global steel player showed "keenness" to consider iron ore from sources other than the much talked-about Chiria mines, suddenly saw both the camps on toes with renewed vigour.

Early this week, the Chief Minister met senior officials of the company in New Delhi and pledged all support to Mittal's investments in the state as the company has also agreed to the state government's "earlier request of considering other areas for their iron ore requirement".

Senior government officials today reiterated that the company was serious about investing in Jharkhand.

The Chiria mines issue was a bone of contention between the state government and Steel Authority of India Limited (SAIL) with both fighting a legal battle over it in the Jharkhand High Court. The Chiria mines, located in West Singhbhum district, have 1.4 billion metric tonnes of iron ore.

Mr Koda said during his discussion with Mittal officials, the issue of iron ore reserves was raised without covering any specifics.

After signing the agreement in 2005, Mr Mittal expressed desire for iron ore reserves of 600 million tonnes for the next 30 years and sought Chiria mines. With the stand off between the government and SAIL refusing to thaw, steel magnate L N Mittal, had said there would be no project in Jharkhand if it did not get Chiria mines and built up pressure tactics by indicating shifting the proposed plant to Orissa.

Mr Koda, who came to power in September last year, said the government offered the Ankura mines to Mittal Steel as it was fighting a legal battle with SAIL over it.

The government's relentless effort to persuade the steel major that the Ankura mines could fulfil their demands only fell on deaf ears as the latter rejected it saying they wanted mechanised mining which was not possible in that mine.

During last meeting in New Delhi, an upbeat Chief Minister said the Ankua mines might be back on offer and could be part of subsequent talks.

According to government estimates, Ankua mines cover an area of 3.10 sq km and have an iron ore reserve of 412 million tonnes.

Meanwhile, the state government is working on an out-of-court compromise with SAIL over the issue.

The erstwhile Indian Iron and Steel Company (IISCO) held the leasing rights of all six blocks of Chiria. After IISCO's merger with SAIL, the latter laid claim over the mines. The state government has refused to renew the mining leases and the matter was pending with the High Court now.

With efforts on to bring back major investors, the Koda government also assured SAIL of all their needs for iron ore.

From initial "no" by the Mittal group to its readyness to look beyond Chiria, the state government had to undergo lot of criticism and strain in the past two years.

Besides, refusuing to give in to Mr Mittal's pressure tactics to set a steel plant in Orissa and also his refusal to grant Chiria mines and proposal of giving land tagged with certain conditions indicated that the state government was getting tough with the company and other investors.

Observers felt that if the proposed plant was set up besides an out of the court settlement with the SAIL, the Koda government would receive a shot in the arm only.

UNI