Loss of iron ore mine and delayed land allocation in Chhattisgarh have compelled Tata Steel to quit its steel project in the state.
Tata Steel, one of the pioneering Indian steel manufacturers has cancelled its plan of setting up a 5.5 MTPA green-field integrated steel plant in Bastar district of Chhattisgarh.
The company had signed MOU (Memorandum of Understanding) with the government of Chhattisgarh in June 2005 with an estimated investment of INR 19,500 crore. However, the proposal was not realized in 2005 and it was extended till July 2016.
But now, as the project proposal didn’t get finalized this year also, the company has not sought another extension and has completely withdrawn its project plan.
The key reason for the same cited by the company is delay in land allocation by the state government.
The site chosen by the company in Bastar district was of about 2,000 acres spread across 10 villages. However, the selected area is declared by the state government as tribal area resulting which the company was unable to purchase it directly from the villagers. It required state government as a middleman to procure land from the villagers.
Another crucial reason for the withdrawal of Tata Steel from the project is loss of high-grade iron-ore mines in Bailadila with estimated reserves of 108 MnT. This iron ore mine which was allocated to the company in 2008, is located in Dantewada district, which is about 150 km from the steel project site in Bastar.
As the above iron ore mine area is infamous for its naxalite presence, the company was unable to carry out the prospecting work within the set time frame and the prospecting license issued to the company by the state government was subsequently cancelled.
With the loss of key source of raw material and delayed land allocations by the state government, Tata Steel made a move to quit its steel project plan in Chhattisgarh and has also closed down its offices in Raipur and Bastar region.
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