The stoppage of production at the Thakurani iron ore mines in Odisha from April 1 after it was denied environmental clearance could hit the Naveen Jindal-owned Jindal Steel and Power (JSPL). The steel major will now have to tie up with other mines in Odisha and Chhattisgarh to meet the raw material requirements for its Barbil pellet unit and Raigad steel mill, besides augmenting captive ore production.
Ore from Thakurani mines licensed to Sarda Mines is believed to have been cheaper and JSPL would have to put up with some cost increase in input sourcing, market sources said.
When contacted, a JSPL spokesperson said, “The company sources part of its iron ore requirement from Sarda. There (will be) no (immediate) material impact (on the firm) as adequate stocks of iron ore are available with the company. The company, if required, can ramp up iron ore production of its own Tensa Mines as also source it from several mines in its neighborhood in Odisha.?
JSPL was sourcing iron ore produced at Thakurani for its 5 million tonne per annum (mtpa) pellet plant at Barbil in Odisha and lumps for its 3 mtpa steel unit in Raigad, Chhattisgarh.
Sarda Mine is also being investigated by a Supreme Court-appointed committee for alleged over-production in violations of Rule-37 of Mineral Concession Rules-1960. ?Odisha?s directorate of mines has ordered the closure of Sarda Mines, which were also majorly supplying to JSPL,? a mines ministry official said. ?No deemed extension has been given to Sarda, while the other mines are working under deemed approval,? he said.
The Shah Commission report on iron ore mining in Orissa was very critical of the system of iron ore mines working under the deemed extension basis in the state. Deemed extension can be given for a year, but most mines in Odisha have been working under this system for years now as the leases have not been renewed.
The committee appointed by the apex court is also learnt to be probing an alleged illegal tie-up between JSPL and Sarda Mines in the operations of the Thakurani mines. Sarda had been accused of selling the entire production of its mines to JSPL without any written agreement, allegedly at a price lower than the prevailing market rate.