By Anurjay Dhal
RAJKANIKA/KENDRAPARA(ODISHA): The Sajjan Jindal owned JSW Steel, which had won as many as 4 Big size Iron Ore –Manganese Blocks under Joda-Koira mining circles of Odisha’s mineral rich Keonjhar –Sundargarh regions, is expected to start its mining operations by July 1 this year, sources in Bhubaneswar, about 120 km away from here said on Tuesday.
Sources said the JSW Steel has got nod of Union Forest and Environment Ministry to produce 29 Million MT per annum from 4 blocks of Ganua Iron Ore, Jajang Iron Ore, Narayanposhi Iron and Manganese and Nuagaon Iron Ore. Company hoped that once the 4 blocks functions with full capacity, it is expected to produce around 36 Million MT per annum and meet about 70% of its requirements. At present, Sajjan’s JSW has only 15% own Iron Ore Resources.
Bank of Baroda last month had extended financial assistance to JSW Steel “in the form of term loan for a sum not exceeding of INR 1294.65 crores and bank guarantee facility for a sum not exceeding INR 1000 crores for the purpose of financing the upfront payment obligations of JSW under the tender documents as a preferred bidder for acquisition of mining lease pertaining 4 blocks in Odisha.
The term loan facility of INR 1294.65 crores and the bank guarantee facility of INR 1000 crores had been provided to JSW for making upfront payment for the acquisition of the Mines and furnishing the relevant performance , payment guarantees under the tender documents and some other payments to be made with respect to the acquisition and development of the Mines.
Majority parts of the Mines are over forest land over which mortgage cannot be created by JSW under applicable laws. Hence the security package had to be structured in a manner to maximize value for the lenders while continuing to comply with the restrictions on creation of mortgage over forest land.
JSW won 4 major blocks which earlier held by KJS Ahluwalia Group and Rungta Mines Ltd Group– Nuagaon (won on January 31),Narayanposhi ( won on February 2) and Ganua ( won on February 5) and Jajang ( won January 6) – with total ore reserve of 1,138.34 million tonnes. With the 4 Mines, an iron ore reserves linkage of more than 1,100 million tonnes has been secured for JSW Steel of Sajjan Jindal.
JSW Steel will have pay dues to Government for Nuagaon ,Narayanposhi,Ganua and Jajang blocks. Value of estimated reserves in INR Crores are as follows Nuagaon (Rs 1,85,683,47), Narayanposhi(Rs 42,571,12), Jajajng (Rs 5,511,44) and Ganua(Rs 24,982,79). This included 1% resource value, 0.5% affront payment and 0.5% performance security. For example, 1% security deposit for Nuagaon block will be around Rs 1856 Crore and NPV and stamp duty will be calculated extra.
The Sajjan Jindal is eyeing on POSCO site in Odisha’s Jagatsinghpur close to Paradip Port and debt ridden Bhushan Steel and Power Limited to expand its mining and steel business in Odisha like his brother Naveen Jindal, who owns Jindal Steel and Power Limited, which running an Integrated Steel plant in State’s coal bearing Angul district and has couple mines block including Guali Iron Ore Block in Keonjhar-Sundargarh regions and also having stake at the controversial Sarda Mines Pvt Ltd. JSPL is also eyeing several Coal blocks in Odisha, which will be put for auction by Union Coal Ministry in July this year.
