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Telangana looks for Iron Ore mines in Orissa and Chhattisgarh


Telangana is looking at acquiring iron ore mines in Orissa and Chhattisgarh to ensure adequate quantity of iron ore reserves in its possession in a bid to guarantee viability of the proposed integrated steel project of Steel Authority of India (SAIL). The move comes weeks after the state-owned steel giant expressed its inability to set up the proposed integrated steel project in Bayyaram region of Telangana in the proposed configurations, citing inadequate availability of quantum and quality of iron ore reserves.

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SAIL was asked by the union government to consider setting up an integrated steel project of at least 3 million tonnes involving an investment of around Rs 30,000 crore as promised under the Andhra Pradesh state Reorganisation Act 2014. A task force appointed by the union steel ministry had submitted its report claiming that the proposed project was financially unviable with the proposed configurations.

“The Telangana government was disappointed with the report of the steel ministry’s task force on the viability of the proposed integrated steel project, the first to come up in the state,” a Telangana bureaucrat told ET. “At a recent meeting held by the state mines minister T Harish Rao, the state gov ernment has decided to explore opportunities to acquire iron ore mines in Orissa and Chhattisgarh, including obtaining lease,” said the bureaucrat. If successful, this would become the first such acquisition of iron ore mines by Telangana outside the state limits.

Earlier, through its state mineral development corporation, Telangana had a coal block in Madhya Pradesh that got deallocated through a Supreme Court order. “Harish Rao has also directed the officials to explore optimum incentives and concessions from the union government to make the proposed integrated steel project of SAIL at Bayyaram financially viable,” said the bureaucrat.

The then managing director of Telangana state industrial infrastructure corporation, Jayesh Ranjan, told ET in April that the SAIL representatives had sought significant incentives from state and union gov ernments to help improve the internal rate of return (IRR) to around 17% from the estimated IRR of less than 11% to turn the project financially viable. The incentives sought by SAIL included rebates in excise and income tax from centre, and reimbursement of VAT and power and investment subsidies from the state, he said.


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