Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The Ministry of Environment and Forest yesterday gave forest clearance to SAIL for mining iron
ore from Chiria reserves in Jharkhand for 20 years. The Chiria mine has iron ore reserves of
1.8bn tonnes and is crucial for SAIL's long-term raw material supply needs as it expands hot
metal capacity to 23mt by FY13.
Forest clearance for mining iron ore in Chiria
The Ministry of Environment and Forest (MoEF), yesterday gave forest clearance to Steel
Authority (SAIL) for mining iron ore from Chiria in Jharkhand for a period of 20 years. The
clearance is for three mining leases which contain about 1bn tonnes of reserves. Notably, the
ministry overruled the recommendations of the Forest Advisory Committee in granting the
same.
Chiria mine has 1.8bn tonnes of high quality iron ore reserves
The Chiria mine is home to 1.8bn tonnes of high quality (>62% iron content) reserves and
SAIL already holds the mining rights for about 40% of the reserves. The mine is expected to
meet about 40% of SAIL's requirements over the next 50 years. SAIL's current iron ore
consumption is about 23mt pa, which is expected to go up to 39mt post-expansion. Chiria is
expected to meet a sizable portion of this.
Conditional clearance, though
However, 13 specific conditions have been laid out apart from the usual, which includes
compensatory afforestation. These specific conditions among others include: 1) Only mining
and primary and secondary crushing would take place in the forest area. Processing,
beneficiation, blending, stockpiling, railway sidings, infrastructure and all township facilities
will be 15km away in non-forest land. Only conveyor systems will be used for transportation of
ore. 2) A cluster management approach will be adopted for mining-related activities to avoid
excessive fragmentation. Thus, the diverted area will be broken up in phases. 3) Forest roads
will not be used by SAIL during night time. 4) over the next 20 years, only 25% of the total
forest area being diverted (equivalent to around 595 hectares) will be broken up. and 5) SAIL
will earmark at least 2% of net profits for CSR activities.
Still a key long-term positive
While these added conditions might hinder production and evacuation at a normal clip, we
believe overall, the approval is a key positive for SAIL for ensuring iron ore integration
continues at 100% even as it expands capacity in phases.
This paves the way for production to commence in FY13
SAIL has a total of 10 mining leases in Chiria, of which 4 leases was stuck in a legal battle
with the Jharkhand state government over renewal. This was renewed by the government
only in end 2009. With SAIL now getting forest clearance, this paves the way for mining to
commence by FY13.
We have a Hold on SAIL with target price of Rs165.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The Ministry of Environment and Forest yesterday gave forest clearance to SAIL for mining iron
ore from Chiria reserves in Jharkhand for 20 years. The Chiria mine has iron ore reserves of
1.8bn tonnes and is crucial for SAIL's long-term raw material supply needs as it expands hot
metal capacity to 23mt by FY13.
Forest clearance for mining iron ore in Chiria
The Ministry of Environment and Forest (MoEF), yesterday gave forest clearance to Steel
Authority (SAIL) for mining iron ore from Chiria in Jharkhand for a period of 20 years. The
clearance is for three mining leases which contain about 1bn tonnes of reserves. Notably, the
ministry overruled the recommendations of the Forest Advisory Committee in granting the
same.
Chiria mine has 1.8bn tonnes of high quality iron ore reserves
The Chiria mine is home to 1.8bn tonnes of high quality (>62% iron content) reserves and
SAIL already holds the mining rights for about 40% of the reserves. The mine is expected to
meet about 40% of SAIL's requirements over the next 50 years. SAIL's current iron ore
consumption is about 23mt pa, which is expected to go up to 39mt post-expansion. Chiria is
expected to meet a sizable portion of this.
Conditional clearance, though
However, 13 specific conditions have been laid out apart from the usual, which includes
compensatory afforestation. These specific conditions among others include: 1) Only mining
and primary and secondary crushing would take place in the forest area. Processing,
beneficiation, blending, stockpiling, railway sidings, infrastructure and all township facilities
will be 15km away in non-forest land. Only conveyor systems will be used for transportation of
ore. 2) A cluster management approach will be adopted for mining-related activities to avoid
excessive fragmentation. Thus, the diverted area will be broken up in phases. 3) Forest roads
will not be used by SAIL during night time. 4) over the next 20 years, only 25% of the total
forest area being diverted (equivalent to around 595 hectares) will be broken up. and 5) SAIL
will earmark at least 2% of net profits for CSR activities.
Still a key long-term positive
While these added conditions might hinder production and evacuation at a normal clip, we
believe overall, the approval is a key positive for SAIL for ensuring iron ore integration
continues at 100% even as it expands capacity in phases.
This paves the way for production to commence in FY13
SAIL has a total of 10 mining leases in Chiria, of which 4 leases was stuck in a legal battle
with the Jharkhand state government over renewal. This was renewed by the government
only in end 2009. With SAIL now getting forest clearance, this paves the way for mining to
commence by FY13.
We have a Hold on SAIL with target price of Rs165.
No comments:
Post a Comment