KOLKATA (miningweekly.com) – Boosting its aim of achieving greater raw material security, Steel Authority of India Limited (SAIL) would appoint mine developer operators (MDOs) for its existing mines, and start exploratory work on new licences, within the next two months.

The country’s largest integrated steel producer has completed the selection of an MDO from a list of applicants and would sign a contract within the next two months for its mines at Rowghat, in the central Indian province of Chhattisgarh and Chiria, in Jharkhand, in the east, a company official said.

In June, the company invited expressions of interest from domestic and foreign MDOs based on which a short-list had been drawn-up and contract terms and conditions agreed upon between it and the selected miner, the official said, declining to identify the MDO as the contract was yet to be signed.

SAIL was been granted a mining lease for exploratoration and development of iron-ore and other minerals across 870 ha in the central Indian desert province of Rajasthan. The company would start work this year, and based on the report would firm-up its investment plans, the official added.

The development of Chiria, with estimated reserves of 1.8-billion tons of high grade iron-ore, has been hanging fire since 2012, when SAIL drew up a $1-billion investment plan to mine 15-million tons a year of ore in a project to be implemented in two to three phases.

The official said that work on the first phase would start within the current fiscal and production of around seven-million tonnes a year had been scheduled within four years from the date of signing of contract with the MDO, as per tthe contract erms and conditions.

SAIL would have the option of renewing its contract with the selected MDO, to execute the second phase expansion of the Chiria reserves, closer to date of completion of the first phase, the official added.

The steel producer was planning a production of 14-million tonnes a year from its Rowghat reserves at an investment of $600-million but the investment could be higher in view of cost escalations since the project was first conceived.

SAIL’s mining initiatives come on the heels of the company announcing last week that the company was putting the finishing touches to a Vision 2025 document.

SAIL chairperson C S Verma said that the strategic growth plan would involve doubling hot metal production to 50-million tonnes a year, entailing an investment of around $25-billion by 2025.

He said that the company had invested around $1.6-billion each year for the past five years and had earmarked $1.4-billion for the current year for modernisation and expansion, part of which would ride on starting expansion and development of captive iron-ore resources.