KOLKATA (miningweekly.com) - Dogged by inordinate delays, the Steel Authority of India Limited (SAIL) has approached the Project Monitoring Group headed by Indian Prime Minister Manmohan Singh, to seek final clearance for an iron-ore expansion project in the eastern province of Jharkhand.

According to a company official, the country’s largest steel producer was compelled to move to the highest investment clearance authority - after the $478-million brownfield iron-ore mining expansion missed several internal deadlines following delays in securing forest clearance - for the final approval required to start project work.

The expansion of the Gua iron-ore mines included ramping up capacity to 10-million tonnes a year, from 2.4-million tonnes a year at present; a 12.5-million-tonne-a-year beneficiation plant and a four-million-tonne-a-year pelletisation plant.

The mine expansion has been delayed as the Saranda forest, where the mine is located, was environmentally fragile and required a detailed biodiversity plan to be put in place for mining activities. The Environment and Forest Ministry has been "taking its time" in granting the Stage II (final) clearance, the official said.

The Ministry, previously headed by Minister Jairam Ramesh, has been vehemently opposed to any mining activity in the Saranda forest, delaying the expansion of Gua, which has as estimated reserve of 142-million tonnes of ore.

SAIL had initially planned to complete the techno-economic report and to appoint a mine developer/operator by October 2012.

The Gua mines were inherited by SAIL when it acquired Indian Iron & Steel Company Limited (IISCO) in 2006.  The mine had been in production sporadically, stopping mining in 2011, when its approvals expired, only to resume early this year, after the mine was accorded temporary approvals by the Environment and Forest Ministry, the official added.

The expansion of the Gua mines was critical for SAIL, which sources its entire iron-ore requirements from its own captive mines, and it had put in play plans to double its raw material production to 39-million tonnes a year to support steel production of 21-million tonnes a year by March 2014.

Supplies from Gua would ensure raw material security for SAIL’s Durgapur steel plant and IISCO steel plant, in the neighbouring province of West Bengal.