Indian state-owned steelmaker Steel Authority of India Limited (SAIL) will choose a mine developer and operator (MDO) for its 15 million mt per year iron ore mine at Rowghat in the central Indian state of Chhattisgarh by the end of November, a company official said on Monday, October 24.
The official said that SAIL had commenced inviting offers from domestic and international MDOs for development of the Rowghat mine which has an estimated reserve of over 500 million mt of iron ore.
According to the terms laid down, SAIL is offering the MDO a five-year period for construction and development of the reserves and a production agreement for the subsequent 25 years, the official said.
SAIL has been seeking an MDO since early 2015 and previous MDOs which had submitted offers withdrew at the pre-bid conference stage, largely citing the law and order situation at the location.
The development of the Rowghat mine is critical for establishing a new raw material linkage for SAIL’s Bhilai steel plant. But the iron ore reserves location has been plagued by violence and disruptions by ultra left extremists in the largely forested region, leading to previous MDOs balking at taking up the project, according to the official.
However, after series of consultations with the state government and the Federal Ministry of Home Affairs, the central government had deployed large contingents of paramilitary forces specialized in combating extremists and this will bolster confidence among MDOs to go ahead with the project, the official added.