Indian state-owned steelmaker Steel Authority of India Limited (SAIL) which is set to award a contract for the development of its Rowghat iron ore reserves has set a timeline of eight years to achieve full capacity of 14 million mt per year, company sources said on Wednesday, July 26.
According to the sources, the mine developer-operator would be given five years to develop the mine and another three years to achieve full capacity production.
As per the contract terms to be agreed between SAIL and the mine developer-operator, the latter would be paid INR 400/mt ($6/mt) for iron ore for a period of 30 years of operation of the Rowghat mines, the sources added.
The Rowghat mines will be critical for raw material to feed SAIL’s Bhilai Steel Plant (BSP) since its existing linked Dalli Rajhara iron ore mine is fast depleting and is not expected to last more than five or six years.
BSP is currently undergoing expansion to seven million mt per year from 5.3 million mt per year and will require about 12 million mt per year of iron ore, expected to be sourced from the captive Rowghat mines.