Essar Steel Bags Odisha Mines, Govt Expects Rs 11,328 cr Revenue

Essar Steel Bags Odisha Mines, Govt Expects Rs 11,328 cr Revenue

BHUBANESWAR: Upstaging several strong contenders, Essar Steel has emerged as the successful bidder in the first iron ore block offered for e-auctions in Odisha. The state government expected to earn a revenue of Rs 11,328 crore from the bidding process.

Essar bagged the block upstaging strong contenders like Tata Steel, Jindal Steel & Power Ltd (JSPL) and JSW Steel.
Sources in the steel and mines department said Essar Steel had won the iron ore block participating in the first ever auction process in Odisha.

He said the company emerged as the H1 bidder, quoting a price of 44.5% over the reserve price of the block.
After Tata Steel, JSPL, JSW Steel, Essar Steel, Bhushan Steel Ltd, Bhushan Power & Steel Ltd and Rashtriya Ispat & Nigam Ltd (RINL) had submitted technical bids, the government had initiated the financial bids for the auctions.

Director of Mines Deepak Mohanty, however, declined to comment on the name of the successful bidder stating that the formal announcement would be held on Friday after government approval.

The Ghorhaburhani-Sagasahi iron ore block estimated reserves of over 99 million tonnes (MT), offered for e-auctions is at G2 exploration stage and located in Koira sector in Sundargarh district. The block has been reserved for integrated steel plant as end use, and mining lease (ML) will be issued to the successful bidder.

The total revenue expected from the block over the lease period of 50 years is around Rs 11,328 crore.
An official said the total revenue includes a royalty of around Rs 2,779 crore, DMF contribution of Rs 278 crore, NMET contribution of Rs 56 crore. The total estimated value of the iron ore reserve is about Rs 18,500 crore, the official added.

The mineral concession area of the iron ore block is spread over 139.16 hectares (ha) including 20.88 ha forest land, 110.69 ha government land and the balance 7.58 ha private land.

The state government would issue a ‘Letter of Intent’ to the successful bidder upon payment of the first instalment of the upfront payment.