Chhattisgarh rejects sponge iron, power plant proposal

Chhattisgarh rejects sponge iron, power plant proposal

IANS

17th July 2006

By Sujeet Kumar, Raipur

The Chhattisgarh government has rejected a proposal by National Mineral Development Corporation (NMDC) to set up a sponge iron plant and a 10-MW power plant in the Bastar region, saying the state-owned firm had not lived up to a decade-old promise for a steel plant in the same area.

NMDC, India's largest iron ore producer and exporter, had pushed a proposal earlier this month for a 200,000 tonne-per-annum-sponge iron plant and a power plant at Nagarnar, 16 km from Bastar district headquarters, Jagdalpur.

NMDC has iron ore mining facilities in Bastar's Bailadila hilly areas since 1968 and has been currently excavating nearly 75 percent of its total annual iron ore from Bailadila's three major iron ore deposits.

It set up a joint venture this month with the state-government owned Chhattisgarh Mining Development Corporation (CMDC) for opening up a new block, Deposit No.13, in Bailadila that has around 350 million tonnes of the world's best quality iron ore stocks.

NMDC said it was also contemplating a pellet plant in the Bastar region in a joint venture with the Rashtriya Ispat Nigam Limited (RINL).

"The Chhattisgarh government has rejected the proposal in totality as NMDC has failed to keep up its previous written promise for setting up a Romelt-technology-based 1.5 million tonne-per-annum steel plant at Nagarnar, for which the government handed over 403 hectares land to the NMDC in 2002 overcoming stiff protest by locals," a top industry official told IANS.

NMDC had in the late 1990s announced plans to set up a steel plant at Nagarnar for which it was to manage the Romelt technology, used for extracting iron from any iron-bearing wastes of mines, from its foreign collaborator - Moscow Institute for Steel and Alloys (MISA).

"The Chhattisgarh government is in no way interested in NMDC's fresh proposal. How can the government allow it to build a sponge iron unit at Nagarnar, the same site that the company had selected 10 years ago for setting up a steel plant. NMDC later said the Romelt technology proposal had been deadlocked with MISA," the official added.