Bhilai expansion hits stumbling block
Steel Authority of
India Limited's (
SAIL) largest steel plant, Bhilai, may face a raw material shortage unless
SAIL can overcome the stalemate with the railway and environment ministries regarding the Rowghat mining project.
Bhilai currently obtains its
iron ore from its deposits at Dalli-Rajhara, 100 km from the plant. Because Dalli-Rajhara is thought to contain only six more years of reserves,
SAIL is anxious to exploit the reserves at Rowghat. With Rowghat's reserves of more than 550 million mts,
SAIL could supply its Bhilai plant for the next 75 years.
SAIL plans to invest Rupees 100 billion ($2.3 billion) in the Rowghat project, which they hope to complete by 2012. However, opposition from the railway and environment ministries could derail the entire project. Rowghat is located 235 km from the Bhilai steel plant, and the opposing ministries worry that the required railway link could damage several species of rare medicinal plants.
Bhilai produces five million mts of hot metal per annum. It is anticipated that output would increase to seven million mts per year by 2012. The plant recently started producing 78-meter-long rails, and plans to produce 260-meter-long rails. In addition,
the plant will produce 450 million mts of special steel plates for the Indian navy.
Unless the deadlock is broken,
SAIL will have to look elsewhere to supply Bhilai with raw materials. One option is the Jharkhand's Chiria mines owned by Indian Iron and Steel Company (IISCO).