Mining leases trouble SAIL and BHP's jv mine plan

Mining leases trouble SAIL and BHP’s jv mine plan

As reported by SteelOrbis in late January, Indian steel producer Steel Authority of India Ltd (SAIL) and Australian mining company BHP Billiton are in preparation to form two mining joint ventures. An iron ore mine will be in India and a coal mine will be in Australia. However, according to the recent market reports, SAIL's control over the iron ore mine in Chiria, India through its wholly owned subsidiary Indian Iron and Steel Company (IISCO) ended on June 30, 2004. The state government, controlling the mines, has not yet decided whether to renew leases in favor of IISCO. Besides, over 30 companies have reportedly applied for the leases. Another issue is that mining leases in India are extended by the state government, requiring lease holders to build a sponge iron plant or an integrated steel plant, in order to hold capital investments within the country. Meanwhile, SAIL reported that a feasibility study is going on for the mine in Chiria and a memorandum of understanding is expected to be signed by August 31 latest.