SAIL scores a point in Chiria iron mines dispute

As a battle continues to rage between state-run steelmaker Steel Authority of India Ltd and the Jharkhand government over control of the Chiria iron ore belt - Asia's largest, with proven reserves of two billion tonnes of high-grade ore - it is reported that SAIL will not only get a billion tonnes, but will also be entitled to stake claim to some of the remainder.

After SAIL's stated requirements have been met, the rest will go to the private sector, according to a Business Standard report quoting anonymous sources.

Right now, only SAIL has any leases on Chiria. It has already proposed to set up a new 12-million tonne steel plant in Jharkhand. This would translate into a requirement of 600 mt from the unallocated billion tonnes of ore.

This leaves very little for the private sector, especially ArcelorMittal, the world's largest steel maker. Mittal signed an agreement with the Jharkhand government in 2005 to establish a mega steel unit, and was assured of supply from Chiria.

The Jharkhand government and SAIL have locked horns over the ownership of the Chiria mines for more than three years. The state continues to dispute SAIL's claim over the mines, which were allotted to the erstwhile Indian Iron & Steel Company (IISCO), subsequently merged with SAIL four years ago.

In fact, the state government terminated three out of six mining lease of IISCO in the Chiria to release iron ore resources for meeting the captive requirements of other steel companies, including ArcelorMittal.