India's Essar group has been granted a mineral concession by Brazil's DNPM (Departmento Nacional de Producao Mineral) for 7851 hectare plot at Amapa, northern Brazil. If successful it is hoped the mine will cater for Essar's proposed steel plant in Trinidad and Tobago.
P R Dhariwal, chief executive officer for the project, said that the survey would take 6-8 months and as part of the concession, Essar would be able to conduct exploratory mining for iron ore, manganese ore, chrome ore or any other available mineral. The group would then go ahead for a full scale mining license based on the results of the exploration.
The area is 150 km from the Santana Public Port in Macapa, on the banks of the Amazon river.
The 2.5-million-tonnes steel plant in Trinidad and Tobago is part of the group’s plan of achieving a capacity of 20-25 million tonnes by 2012 from its current level of eight million tonnes. Sources say that Essar was in the process of achieving financial closure for the Trinidad and Tobago project.
The Brazil iron ore resource would be Essar Steel’s second international raw material deposit. In 2007, Essar Steel acquired Minnesota Steel, which has more than 1.4 billion tonnes of iron ore resources in the Mesabi range.
In India the company has a prospecting licence in Chhattisgarh but is still awaiting necessary clearances. The company sources most of its iron ore requirements from public sector miner, NMDC.
Essar has a capacity of 4.6 million tonnes at Hazira in Gujarat, and plans to increase it to 10 million tonnes. The company is also setting up a six-million-tonne integrated steel plant in Orissa.
Indian steel companies are increasingly abroad for raw material assets as the allocation is much quicker.
India has approximately 23.59 billion tonnes of iron ore scattered in Jharkhand, Orissa, Chhattisgarh, Karnataka and Goa, though only 6.311 billion tonnes is proven reserves.
“Allocation takes time and even if we get a licence, it will take a couple of years before one can start mining in India,” pointed out an industry representative.
Source: Business Standard
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