Bubaneswar: Odisha government has issued a Letter of Intent (LoI) to Essar Steel after it emerged as the successful bidder in the first e-auction of iron ore block in the state, an official said today.
Director of Mines Deepak Mohanty said the LoI has been issued to Essar Steel, which bagged the Ghorhaburhani-Sagasahi iron ore block in the e-auction held last month.
Stating that the LoI is valid for a period of three years from the date of issue, Mohanty said Essar would have to obtain all statutory clearances, including forest clearance, during this period.
The government would execute a mine production-cum- development agreement with the company after getting the necessary permits, he said, adding that the company has initiated the process for obtaining the required clearances.
Essar Steel India Ltd bagged Ghorhaburhani-Sagasahi iron ore block in Sundargarh district.
As per the price offered by the company, it would have to give 44.35 per cent of its sale proceeds, in addition to the royalty, a senior official said.
Apart from Essar Steel, companies like Tata Steel, JSPL, JSW Steel, Bhushan Steel Ltd, Bhushan Power and Steel Ltd and Rashtriya Ispat Nigam Ltd (RINL) had submitted technical bids.
The block is at G2 exploration stage and located in Koira sector in Sundargarh district. The block, with deposits of 99.54 million tonnes, has been reserved for integrated steel plant as end use.
The state government had notified for e-auction of Ghorhaburhani-Sagasahi iron ore block in December last year and seven parties which had submitted technical bids had qualified, Mohanty said.
The mineral concession area of the iron ore block is spread over 139.16 hectares including 20.88 hectare forest land, 110.69 hectare of government land and rest 7.58 hectare private land, officials added.
Essar Steel is operating a 6 MTPA pelletisation plant in Paradip which provides vital raw material to its steel plant at Hazira in Gujarat.