JSW Steel Announced Decison to Surrender Odisha Iron Ore Mine

SEATTLE (Scrap Monster): Leading steelmaker JSW Steel announced its decision to surrender an iron ore mine in Odisha, which it had acquired last year through competitive bidding process. The company cited poor ore quality and high premium commitment as the reasons for the decision.

The company had won four iron ore mines in the state, in an effort to have captive mines to feed the proposed 12 mtpa steel plant to be set up at an investment of INR 50,000 crore. It has now decided to surrender the Gonua iron ore block, with estimated reserves of 118 million tonnes. It had won the mine with the committed premium of 130%. The mining lease deed was signed last June and it had begun mining operations in July last year.

ALSO READ:

JSW Steel Posted Highest Ever Quarterly Revenue From Operations

JSW Steel Declared Major Investement to Boost Production Capacity

In a letter to the Directorate of Mines, JSW Steel stated that it intends to surrender the entire area of Gonua iron ore mining lease effective August 22, 2022. Accordingly, the final mine closure plan will be submitted to the Indian Bureau of Mines (IBM), it said.

The phenomenal jump in iron ore prices has made mining economically unviable, with the company required to make payment of 130% premium to the State government for every tonne of ore mined. In addition, the company is also required to strictly adhere to minimum mining quantity every year so as to keep the license alive.