Bhilai Steel Plant, the most profitable unit of the Steel Authority of India Ltd, faces a tense fortnight before it will know whether it can dig for iron ore at Rowghat, its only chance of survival even as it plans to expand steelmaking capacity to 7.5 million tonne a year from 4.2m tonne at present.
With the Supreme Court clearing the mining plans of Posco and Sterlite last Friday, following the green signal of a central empowered committee handling such cases, it is now Bhilai Steel’s turn at Friday hearings. This Friday being a holiday, Bhilai’s case is expected to be heard on August 22. Raghavachari Ramaraju, managing director of the Chhattisgarh-based plant, said he is hopeful about Rowghat. The plant’s current mines at Dalli Rajhara, 85km away, will be exhausted in four or five years.
“We expect that, with Posco’s and Sterlite’s case having been cleared by the Supreme Court…Ours will be coming up next and get the clearance,” said Ramaraju, who has been with Bhilai since joining it in 1972 as a graduate engineer. Rowghat, 180 km from Bhilai, has around 500 million tonne iron ore, which will last the plant 35-40 years at its expanded capacity.
“Dalli Rajhara is depleting fast and we are trying to stretch it to the maximum, but it won’t last us more than another four and a half years maximum,” he said. Bhilai Steel was set up in the middle of nowhere only because of the iron ore reserves, and its location makes imports or even supplies from other SAIL mines uneconomical. It gets Dalli Rajhara ore at Rs 600-650 per tonne, and imports will cost ten times more. “We can’t afford to buy from anywhere else, and at the same time there is no source which can give me the ore,” he said, pointing out that the NMDC Ltd mines nearby are fully booked. “That is precisely the point we are stressing, that an established unit will not have any linkages,” he said. He said, SAIL’s own raw materials division is already finding it difficult to feed the existing plants.
Bhilai is the only SAIL plant that has its own iron ore mines, apart from ISP, the recently acquired Indian Iron & Steel Plant.