SAIL looks to Centre for out of court settlement of Chiria mine dispute

Caught in a long-drawn legal battle with the Jharkhand government over ownership of the Chiria iron ore mine, state-run Steel Authority of India (SAIL) has again started pitching for an out-of-court settlement so that it can “expeditiously” start developing the mine, crucial for its raw material security.

However, work on the prolific mine, which has around 2 billion tonne of high-quality iron ore, can start only after around 400 hectares of additional land is acquired and forest clearances are in place. The mine can start production 5-6 years after the zero date of development work.

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Ownership is the bone of contention. Six leases pertaining to the mine were earlier allocated to erstwhile Indian Iron and Steel Company (IISCO), now part of SAIL. The PSU argues that these leases, following IISCO’s amalgamation in 2006, are its right. Refusing to accept this claim, Jharkhand cancelled three of the six leases held by IISCO, following which SAIL took the matter to the mining tribunal and got a favourable order. The state government, however, opposed it and took the matter to the High Court 10 years ago, Since then, the matter has remained sub judice. Earlier attempts for an out-of-court settlement did not bear fruit.

According to sources, the PSU has recently written to the steel ministry seeking its help “to take up the issue with Jharkhand for an out-of-court settlement.” The Centre, sources said, might support this and the possibility of an amicable solution now looks more real than ever.

SAIL currently meets its entire iron ore requirement from captive sources. However, as the company goes for expansion to 50 mtpa by 2025-26, iron ore from Chiria would become imperative. It generally takes 1.6 tonne of iron ore to produce a tonne of steel.

“Development of a large state-of-the-art mechanised mine with initial investment of above Rs 5,000 crore is crucial for meeting the iron ore requirements of SAIL. However, there are two major issues on account of which the development of mines is getting affected,” SAIL chairman CS Verma wrote to steel secretary Rakesh Singh.

The other issue is land acquisition. SAIL needs to acquire 405 hectares, including 293 hectares private land, so that the development of the mine can be taken up “expeditiously”. However, acquisition of government land and issuance of notification for conducting social impact assessment for private land is not going on as expected.

“We would request help from the steel ministry to take up the issue with the state so that development of the mine can be taken up expeditiously,” Verma said.

The forest ministry had accorded stage 1 forest clearance to the mine in 2011, but the Stage 2 clearance is pending. Upon getting the green nod, SAIL proposes to develop Chiria targeting an annual capacity of 7 million tonne (mt) in the first phase and then ramp it up to 15 mtpa in the second phase.

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