Steel minister Virbhadra Singh seems to be environment and forests minister Jairam Ramesh's next target as the ministry of environment and forests is set to reject to Steel Authority of India Limited's request for renewing its lease on the Chiria mines in Jharkhand. If the lease is not renewed, the PSU's Rs 70,000 crore expansion plan will be seriously affected.

The MoEF is scheduled to take a decision on July 21 on SAIL's proposal. MoEF sources say that the ministry has no plans to renew the lease as it has classified the Chiria mines as a ‘no go’ area and renewing the lease will disturb a migratory route used by elephants. 

Though the steel ministry has not yet been officially informed and the formal decision is pending, Virbhadra Singh is perturbed at indications coming from the MoEF.

“We want the Chiria mines for future raw material security and for the companies under SAIL. SAIL, which has five units, is investing thousands of crores of rupees for expansion and modernisation. If we don’t have the raw material available on long-term basis, all this investment will be useless,” Singh told Governance Now in an interview.

“We are not worried about the raw material needs for the present, but we want to secure raw material supply for long term.”

The Chiria mines are spread over 2,375 hectares in West Singhbhum district of Jharkhand with deposits of two billion tonnes of high-grade iron ore. The mines had been originally allotted to Indian Iron & Steel Company (IISCO), which was merged with SAIL in 2006.

The very existence of the PSU will be at stake if it does not get this iron ore from Chiria, according to a top SAIL official.

The official, speaking on condition of anonymity, said that the present iron ore reserves in SAIL’s possession were not enough to meet its future requirements considering the major expansion plans in the offing.
Singh said: “I am hopeful that the MoEF will take a rational decision. I am in touch with the PM.

“In the name of forests and environment we can’t compromise with the development of the country. We will see that our resources are used even as the environment is not hurt. If it is done in a scientific way there won't be any harm to the forest. It makes sense to give it (the mining lease) to a company like SAIL which has a very good track record of mining and also looking after mining area properly,” the minister added.