MAC: Mines and Communities

Essar Wins Licence For Bailadila Iron Ore Deposits

Published by MAC on 2007-03-04

Essar wins licence for Bailadila iron ore deposits

4th March 2007

India's leading steel-maker Essar Steel has won the prospecting licence for Chhattisgarh's Bailadila deposits, which has one of the world's finest quality iron ore stocks. This happened after a state-run firm's lease expired unutilised.

The central government has approved the Chhattisgarh government's proposal to award the prospecting license to Essar Steel for a 2,285-hectare stretch in Dantewada district, officials said.

For three decades, the prospecting license for the iron ore reserves was kept reserved for the state-run National Mineral Development Corp (NMDC), which lost the lease in February because it had not begun excavations.

India's largest iron ore producer and exporter in public sector NMDC had got the mining lease right of an area of 3,308.04 hectares in Bailadila deposit no 3 on Feb 3, 1977 for a period of three decades. Its lease expired on Feb 8, 2007. Surprisingly, the NMDC did not excavate a single kilogram of iron ore,' a senior industry department official told IANS.

'NMDC was stunned when it was formally informed that its mining lease has automatically lapsed under the Mining and Mineral Act. It was not renewed because NMDC failed to undertake any mining activity,' the official added.

The hilly region of Bailadila, located in Dantewada district, has large reserves of high quality iron ore stocks, divided into 14 deposits. NMDC has been excavating mines in three bigger deposits for domestic supplies as well as for exports to China and Japan. 'NMDC's loss is Essar Steel's gain,' the official said.

Essar Steel will use the Bailadila iron ore to feed its Rs.70 billion greenfield integrated steel plant to be set up in two phases in Dantewada district with a capacity of 3.2 million tonne per annum.

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