Rashtriya Ispat Nigam Ltd (RINL) is poised to obtain its first iron ore mining lease in Rajasthan for relatively low-grade magnetite and may form an equity-linked joint venture with Andhra Pradesh Mineral Development Corporation (APMDC) in February for a high-grade haematite reserve in Andhra Pradesh.
The CMD of RINL, Mr A.P. Choudhary, confirmed the developments and said both were likely to take place next month.
RINL, a public enterprise in the midst of a near four-fold capacity expansion, does not have a captive mine for the key raw material and procures iron ore from various miners, including NMDC.
RINL's applications for mining leases in Rajasthan's Bhilwara district are at an advanced stage of clearance. According sources, the Rajasthan Government has consolidated RINL's two area-specific applications and has decided to allow mining lease rights for 1,043 hectares, out of 5,252.3 hectares applied for.
AP mining
Initial estimates suggest that the total magnetite deposit in the proposed Rajasthan project area, now under consideration, is around 400 million tonnes with an average Fe content of about 41 per cent.
In Andhra Pradesh, home state of RINL's steel plant, the company is in the process of getting into a joint venture agreement for exploration and mining of iron ore over an area of 3,400 hectares of land in Anantapur district of the State.
The area, spread across Obulapuram and Kalyandurg range, is known to have two haematite deposit bands – one with 60 per cent plus Fe content and the other with 57 per cent plus.
RINL had filed application for prospecting licence for the area in October 2011.
As APMDC already possesses the right to prospect and explore in the area, it is now decided that a joint venture of the two will carry out the exercise.
Apart from this, RINL has made applications for six areas in Andhra Pradesh.
Sources said that the proposed Rajasthan mining project will require a magnetic separation and a pellet plant before the ore (fines) usage in the steel plant.