India's SAIL Seeks Global Bids for Beneficiation Plant at Gua Iron Ore Mines

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Researched by Industrial Info Resources (Sugar Land, Texas)--India's Steel Authority of India Limited (BSE:500113) (SAIL) (New Delhi) is seeking bids from global companies to construct a 12.5 million-ton-per-year iron-ore beneficiation plant on a turnkey basis at its Gua mines in the state of Jharkhand. The plant is part of the company's plan to double the iron-ore production capacity of Gua to 10 million tons per year.

Officials at SAIL's raw materials division, which operates the Gua mines, said that the beneficiation plant will be fed with hematite ore that can be found in hard- and soft-laminated forms, along with fines and blue dust that requires beneficiation before being fed into the blast furnaces of the plants.

SAIL operates five integrated steel plants at Bhilai (Chattisgarh), Durgapur (West Bengal), Bokaro (Jhkarkhand), Burnpur (West Bengal) and Rourkela (Orissa). The plants produce 14 million tons per year of steel, which will be increased to 23 million tons at cost of $15.8 billion when the expansion and modernization are completed by 2013. The company's largest unit, which has a 5 million-ton capacity, is in the vicinity of the Gua Mines in Bokaro. SAIL is increasing capacity of the Bokaro Steel Plant to 7 million tons per year. The company is also close to finalizing a collaboration agreement within the next two months with POSCO (NYSE:PKX) (Pohang, South Korea) to construct a 12 million-ton Greenfield steel plant at Bokaro.

To feed the expanded capacities and the joint venture with POSCO, the expansion of the Gua mines at an investment of $125 million aims to rapidly ramp up iron-ore production. SAIL already has committed $386 million over the next three years to develop the Chiria mines, which also are in the state of Jharkhand, to produce 7 million tons of ore per year. The seven iron-ore mines operated by SAIL's RMD currently produce 25 million ton of ore per year. Officials said that SAIL had set an iron-ore production target of 40 million tons by 2013.

However, because the process of securing leases for Greenfield mines, land acquisition and the Greenfield development of mines has taken a long time, SAIL set up beneficiation plants at its existing mines, like one proposed at Gua, so that low-ferrous content ore and fines--either lying as waste of in depleted blocks--could be used through beneficiation, as a medium-term measure to increase supply of the raw material.

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