Bastar Division iron ore mining competitiveness

1. Significance of Bastar Division Iron
ore deposit in the elevation of
Chhattisgarh economy, physical and
social infrastructure…

2. Social & economic Indicators
demanding real and sustained
means of growth @ Bastar division
…

3. Bastar Division
Bastar division is an administrative division of Chhattisgarh state in central India. It includes the districts
of Bastar, Dantewada, Bijapur, Narayanpur and Kanker. It was created in 1999, when the larger Bastar
District was divided into the present-day districts of Bastar, Dantewada, and Kanker. In 2000 the division
became part of the newly-created state of Chhattisgarh.
Of states’ 18 districts five fall in bastar division which constitute of 12.09% of total state population.
Bastar Division Population Spread
1600000
1400000
1200000
1000000
800000 Series1
600000
400000
200000
0
Kanker Bastar Narayanpur Dantewada Bijapur
Source: Census 2011
2001 2011
Chhattisgarh No of towns 97 182
No of villages 20308 20126
Bastar Division No of towns 9 24
No of villages 3945 3934
% % of towns in bastar division 9.28 13.19
% of villages in bastar division 19.43 19.55
While the population graph shows of high inequality in population spread, the latter one
shows the marginal increase in urban cities and marginal decrease in villages. The most
important is where the % of villages would have decreased, the figure has increased. That
shows villages have not decreased, rather increased. No country has achieved growth and
prosperity through a village-based model of development.

4. Majority of population survive in villages. The fluctuation in decadal growth rate can be viewed
on the sidelines of high mining activity spread heading urbanization. Development in a non
developed area is synonymous with physical infrastructure. These physical infra of which steel is
an integral one, builds economy by doubling the pace by enthralling investors due to physical
infra. However census terms urban area which carries one lakh plus population. Does Bastar
know the real mining of Urban world?

5. Chhattisgarh India
Economic Indicators 2009-10 2009-10
Net domestic product (at factor cost) (Rs. crore) (For State) 63297 4493743
Gross domestic product (at factor cost) (Rs. crores) (For India)
Contribution of Agriculture to NSDP/GDP (%) 18.65 14.62
Contribution of Industry to NSDP/GDP (%) 31.74 20.16
Contribution of services to NSDP/GDP (%) 49.61 65.22
Per capita Net State Domestic Product (factor cost) (Rs.) (State) 25835 33731
Per capita Net National Product (factor cost) (Rs) (India)
NDP Growth rate (%) (State) 12.37 8
GDP Growth rate (%) (India)
Chhattisgarh India
Human Development Indicators 2007-08 2007-08
Human Development Index Value 0.358 0.467
Bastar is one of the
most backward regions of
the country. Agriculture
which is the key source of
survival of major
population is mainly
practiced for home
consumption. Commercial
crops are rare. Is the only
hope for the improvement
is the Political stability
and Govt. policy measures
at state only or something
else? If yes, What ?

6. Banking on cluster
competitiveness is advisable for
sustained and harmonized growth.
The nature has provided “Bastar”
abundant ecology (forest and
agriculture plain) and world’s best
quality iron ore deposits…
Minerals play a significant and crucial role in the history of mankind. During the 4th century B.C.,
Kautilya understood the significance of minerals in building a nations' strength. He said, "Minerals are
sources of wealth", and armies can be raised on wealth and the king who has wealth and army can
conquer the world.
India is the world's fourth-largest steel producer but relative to the size of its economy the
country's steel consumption is low. Economic development pushes steel consumption and
Steel consumption push physical infrastructure and further strengthen the economy.

7. Bastar Division Competitiveness (Dark – High, Light – Low)
Mining
Infrastructure
Agriculture
Tourism
Services
Transportation
Bio diversity
Labor (Skilled – low)
Water
Story of Naya Raipur
Located about 20 km east of the present capital Raipur, Naya Raipur has been designed on the lines of
Malaysia’s hi-tech capital complex at Putrajaya, outside Kuala Lumpur, and is expected to cater to the
infrastructural needs of industry and trade in the region. Naya Raipur will have a world-class convention
centre, a five-star hotel, an IT SEZ, a gems and jewellery SEZ, a garment park, a theme residential
township with an 18-hole golf course, an amusement park, super specialty hospitals, commercial office
space, museum, art galleries, entertainment parks, botanical garden, a law university, an education hub,
a cultural centre, malls and a sports complex. New state secretariat building is coming in Naya Raipur in
8,000 hectares. (Source: Business-Standard)
All elements of these which are synonymous with development; demands STEEL. If more
Naya Raipur has to be created it demands more steel. Chhattisgarh has a long way to go on
building its infrastructure.

8. Iron ore deposits of Chhattisgarh
lie in ‘Bastar’ province (+65 Fe
(hematite) – High Grade) …

9. Bastar Region (picture depicts) at
chhattisgarh is the only source for Iron Ore
produce in state. The world’s best quality of
iron ore is found in Bailadila deposits of
Dantewara district which NMDC had been
engaged in extracting. . Important Iron ore
occurrences of the State are iron ore
(hematite) in Dantewada district, Bailadila
deposit in Dantewada district, Chhote
Dongar deposit in Kanker district, Rowghat,
Chargaon, Metabodeli and Hahaladdi
deposits in Rajnandgaon district, Boria
Tibbu deposits in Dalli-Rajhara area, Durg
district. Bailadila-Rowghat hill ranges in the
state are considered to be one of the
biggest iron ore fields in India.
Production of iron ore (quantity and value) and domestic consumption
2008-09
Chhattisgarh Production Value Domestic Consumption
29997 59064269 25631
Total 212960 285444020 126223
% of Total 14.09 20.69 20.31
2009-10
Chhattisgarh Production Value Domestic Consumption
26211 44227248 24115
Total 218553 264620052 130822
% of Total 11.99 16.71 18.43
2010-11
Chhattisgarh Production Value Domestic Consumption
29146 82675755 23869
Total 207998 375343429 126814
% of Total 14.01 22.03 18.82

10. State government economic survey report of 2011-12 says that 80% of population is dependent on
Agriculture. Also human development report published in year 2005 talks of poverty and marginalization
of population at increasing speed due to of low value productivity in Agriculture. The same is attributed
in the Annual plan 2012-13 (presentation before the planning commission) which talks of development
challenges and the eminent one is low value agriculture.
Production of iron ore fines in last three Years So while on the name
of biodiversity the
2007- 2008- 2009- 2010-11
deforestation is a
08 09 10 (Up to Dec.2010)
hurdle to excavation of
Chhattisgarh 17965 18925 14960 11431
Total 115396 120560 126915 86431 natural mining
% of Total 15.57 15.70 11.79 13.23 resources the question
is what is the measure
for running development and economic harmony for the people of bastar province who had been laid
back by years? Poverty, Illiteracy, starvation has already eaten for years and so called “Tendu patta”
leaves can how long feed their starving stomach?
Very recently as part of balancing measures - a farm loan proposed by Govt. of Chhattisgarh of worth Rs.
1700 crore and that too with one percent of interest rate for farmers can hardly feed the 45% of
Chhattisgarh and 70% of Bastar province tribal population because the land itself has lost its produce
and is highly segregated (in pieces).
Worry?
The gap between domestic demand and availability of steel is met through imports.
Finished steel imports have been consistent to five and half million tones for three-four yrs.
What is the need for import when the state can produce more than demand?

11. Kanker is poor in minerals Iron Ore quartzite and garnet mines
are found in region iron and ore deposit have been found in the
region of Bhanupratappur. But mining of these minerals have not
started till now.
About 1000 Lacks ton Iron and ore deposits are verified in
hahaladdi region of the Bhanupratappur Tahasil. The best quality
of this Iron and are can be utilized in the over all development of
industries in the district. Black and white granite are found in
plenty quantity in the district.
Bastar (along with Naraynpur, Dantewada and Kanker) is a tribal
district (70 % are tribal). The total forest area is 7112 sq Kim
which is more than 75 % of the total area of the district.
Dantewada is blessed with various mines and minerals.
Bailadila contains one of the largest deposits of Iron Ore in
the world. The Iron content of the Ore is as high as 68%,
which can easily be termed as of world class quality Ore.
Bastar Division accounts for 40000 square kilometers of area which produces 2366 mn tones
of iron ore which is 1/5th of iron ore deposits of country. The major area is densely covered
by forests and most of these mining reserve lie in forest ranges. Deforestation (ecological
policy compliance – MMDR act) and livelihood on forest produce is the key issue for mining .

12. Bastar Division Iron ore deposits and Reserves
Reserves in million
S.No. District Locality Grade Fe%
tonnes
Bailadila
Deposit No. 1 138 60
2 23 68
3 38 68
4 108 64
5 240 68
1 Dantewara 6,7, 9, 12 27 65
8 30 64
10 204.65 68
11 200.22 68
13 317.24 65
14 17.42 61
1343.53
Chhote Dongar
Deposit No. 1 0.49 64
2 2.18 65
2 Bastar 3 25.44 64-66
4 5.76 64-66
5 1.44 65
35.31
Rowghat
Deposits A 8.06 62.58
B 10.8 50.29
C 55.22 57
3 Kanker
D 167 60
E 14.4 52.93
F 476.45 59.62
731.93
Chargaon
Deposit No. 1 18.36 60
2 3.44 60
Metabodeli 15.6 65.6
Hahaladdi 12.82 64
Ari Dongri 26 65
4 Kanker Raoghat 20.174 M.T. 60 to 68
Source: Directorate of Geology and Mining, Chhattisgarh.

13. However – Integrated Steel
manufacturers face Tremendous
Challenges…
- Corruption
- Stakeholder expectations
- Domination and political clout of incumbent
players
- Naxalite and outlaw activities
- Bureaucracy and slow pace of approvals
?
It is estimated that demand of steel will be 220 MT by 2020 and 500 MT by 2050. The requirement
of iron ore for domestic consumption alone will be 350 MT by 2020 and 900 MT by 2050. Export
quantity will be over and above this. Iron ore resources of India have been estimated to be 23.5
billion tons by Hoda Committee. These targets can only be achieved if setting up of Greenfield steel
plants is fast tracked. But how to move forward when concern of stakeholders list is long?

14. Status of Key Steel Greenfield projects at Chhattisgarh
Project Proposed Progress Made/ Likely date of
Capacity commissioning/ Issues on Land Acquisition,
Environment / Stay Order
SAIL- Bhilai Steel 7.00 MTPA December 12 – March 13 (Brownfield
(3.93 mtpa expansion)
exists)
NMDC – Bastar Steel Plant 3.0 MTPA 90% of the land acquired. Date of completion
– 42 months of “Zero date” i.e. receipt of all
statutory clearance/approvals and placement
of orders for major technological packages.
Total land acquired 1,948 acres. 63 acres
fell in forest areas.
Tata Steel – Bastar Steel Plant 5.5 MTPA 2044 ha (5070 acres) of land. Land
acquisition problem. Capacity to be achieved
by FY 2015. Twice renewal of MoU.
Essar Steel – Bastar Steel plant 3.2 MTPA Applied for 608.33 Ha (1509 acres) (Private
land – 393.21 Ha & govt. land – 215.15 Ha)
Private land passed by the authorities. MoU
renewal under consideration.
Visa Steel – Rajgarh 2.5 MTPA Total Land 1020 acres. Approx 270 acres land
is in possession & further 750 acres land
acquisition is under progress. Environmental
clearance accorded by MoEF. Likely date of
completion of current capacity under
execution – April 2013.
Jindal Steel and Power 3 MTPA Operational. (Brownfield expansion)
Production of iron ore in the public and private sector
2010-11
Sector 2007-08 2008-09 2009-10 (Up to Sept)
Chhattisgarh Private 154 250 518 128
Public 30844 29747 25959 13904
India Private 146733 148214 159387 68980
Public 66519 64746 59253 27968
Total (India) 213252 212960 218640 96948
% of total @ private 0.10 0.17 0.32 0.19
% of total @ public 46.37 45.94 43.81 49.71
Graph depicts the clear monopoly of public sector units and the non presence of competitive
environment for Iron ore produce.

15. Naxalism: A Major Bottleneck of Mining
Half of the Chhattisgarh's 18 districts have come under the category of worst Naxal-infested districts
enabling it to be covered under Centre's security-related expenditure (SRE) scheme.
Adequate protection of mining
operations and people therein is
the sole responsibility of Govt. and
people. If it fails to do so the
objective of socio-economic
harmony can not be met.
However, the steel cluster has a
hope that as the economic
prosperity takes over the poverty,
starvation and unemployment,
sooner or later; the people alone
would be the guardian of
protecting themselves and mining
fields from moist operation.. Also
needless to say that people
engaged in moist operation will
also move forward to join the
main stream as the means of
personal development would have
been addressed by the very steel
cluster.
• From January to September 2010 there have been 134 encounters between
Maoists and security forces in which 160 security personnel have been killed in
Chhattisgarh.
• Mines on target of Maoists in Chhattisgarh
• CPI-Maoist cadres have stopped work of 300 roads which were to be constructed
under the Pradhan Mantri Gram Sadak Yojana (PMGSY) in the Bastar region
• State's Police department facing shortage of weapons & Police Personnel
• Half of Chhattisgarh's diamond belt in Maoist strongholds

16. The biggest bottleneck for
Government as well as Steel
Manufacturers is Land Acquisition.
Availability of land records, tribal
and forested land, R&R
procedures add to acquisition
delays:
Forest Land: Involvement of multiple state and central government agencies in forest land
acquisition leading to inordinate procedural delay.
Tenancy Land: There are no proper Rights of Records not being available with SGs for
identification of ownership of land, along with lack of support from local administration and local
governments.
State government, as the custodian of the mineral resource, has failed to help these investors by
expediting their applications on the basis of a fair and transparent implementation of the guidelines
outlined in the MMDR Act. State government has continued to sit on the applications for years thus
ignoring the development of their people and economy. The point is they can sit based on the positional
power they bear but as long as economic viability of the project is there the investor is there, which they
should mind for. The very negligence leaves a bad impression on potential investor sentiments and
motivation. Chhattisgarh government is vying for potential investment in services sector but has been
unable to locate them. Services will only grow when there is skilled labor, infrastructure and government
protection.

17. A matter of concern for Bastar division land
The sale price of Iron ore in India varies between Rs. 2500-3500 per tonne. The cost for mining per tonne
of iron ore comes to be around Rs. 500. While this drives the motivation of large players, the betting
concern of land acquisition problem for steel plant does not end here…
Company Capacity addition Land Required
NMDC 3.0 MTPA 1948 acres
Tata Steel 5.5 MTPA 5070 acres
Essar steel 3.2 MTPA 1509 acres
Visa Steel 2.5 MTPA 1020 acres
Total 14.2 MTPA 9547 acres
According to above figure obvious info is VISA steel has low land requirement. So considering the base of
Visa steel .5 MTPA of steel plant demands 204 acres of land. Based on the same hypothesis the scenario
is as follows:
Company Capacity Land Difference (%)
NMDC 3.0 MTPA 408X3 = 1224 acres 70.98
Tata Steel 5.5 MTPA 408X5.5 = 2244 acres 277.06
Essar Steel 3.2 MTPA 408X3.2 = 1305.6 acres 19.94
Visa Steel 2.5 MTPA 408X2.5 = 1020 acres 0
It is two way round. Government itself is not liable for the delay; the delay is because of greed to
acquire more land. It’s a serious concern. Isn’t it? A framework is therefore needed to control the
mechanism of land which halts other eminent players in expansion, as the motivation thrives among
people from one example to another who contimues to protest the steel manufacturers. So if Tata
Steel project land acquisition is having a problem because of huge land mass to operate the other
player will face the same consequences too, which is obvious now…

18. Govt. must promote integrated
players (steel + mining) above 2
MTPA and cut aside obstructions to
achieve social, environmental and
economic balance…
Iron ore mining in India is only 10 per cent by the big players. The rest is all with the unorganized and
small players. The same is in context with steel manufacturers. Sponge iron producers in Chhattisgarh
are in large size which gain iron ore from NMDC. The steel makers in the state purchase 3 million tonnes
of iron ore per annum from NMDC.
As per State Investment Promotion Board, Chhattisgarh, generally units up to 50 TPD capacity are
classified as “Small” (investment below Rs 5 crore) and units up to 100 TPD capacity are classified as
“medium” (investment below Rs 10 crore). Based on this criteria 31 units are covered under “small &
medium scale” to whom NMDC is supplying iron ore. According to 2009-10 estimates these 31 units
consumed 1.99 Lakh tones of iron ore by NMDC. There is no doubt that five and ten crore investment
firm will not do efficient conversion of iron ore because of lack of technology and skills required. This
results in also huge proportion of air pollution causing environmental degradation. It is not that they are
not bothered of but their financial liberty and project viability does not allow for the same.
Details of iron ore supplied by NMDC to these Industries during past three years:
Type Nos. 2007-08 2008-09 2009-10
Small Scale 10 0.31 0.22 0.03
Medium Scale 21 1.83 2.07 1.96
Total (S+M) 31 2.14 2.29 1.99

19. How beneficial could be these
Greenfield projects at ground
level?
Environmental
Provide strength Reduce poverty and
balances will be
among people to fight bring tribal population
maintained as part of
against Naxalism to in mainframe further
CSR, balancing socio-
protect their cutting Govt.
environ harmony
livelihood expenditure
Provide
Boost agriculture
infrastructure
productivity
(Roads, drinking
(financial liberty)
water, schools,
and cut Govt
home etc.) as part of
expenditure
CSR and R&R
Utilization of
workforce in mining
and steel
manufacturing

20. The steel production has to
increase at a fast rate to keep
pace with the GDP growth rate of
9% being projected in the coming
years. In order to transform this
fledgling steel industry into a
flourishing and competitive one,
a concerted step aimed at
achieving competitiveness is not
an option but an urgent need of
the hour…

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Produced by:
Nilesh Kumar (New Delhi) Nilesh.incl@gmail.com