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Min Mec Consultancy Pvt. Ltd.

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t' CHAPTER 1

N- INTRODUCTION
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BACKGROUND

Tata Sponge lron Limited (TSIL) was incorporated in 1982 as a joint venture
of Tata Steel and the lndustrial Promotion & lnvestment Corporation of
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Orissa Limited (lPlCOL). lt was set up for the production of sponge iron
s based on the TISCO Direct Reduction (TDR) technology, which was
developed in-house at Tata Steel. Later during 1991, Tata Steel acquired
*, lPlCOLs stake and at present TSIL is a sister company of Tata Steel.

TSIL plant is located at Biteipada near Joda, in the Keonjhar District of

Orissa. Frcm the point of view of raw materials availability, infrastructure
facilities and accessibility to ttre market, the plant is ideally located in the
close proximity of iron ore mines and sponge iron consumers of Eastern
rcgion.

The plant was initiatly designed for a production capacity of 90,000 TPA,
which was enhanced to 1,2b,000 TPA through various modifications during
1990-91. Later, to cater to the growing demand of quality sponge iron, TSIL
doubled its capacity by adding another kiln of equivalent capacity in 1998-
99.

ln December, 2001 TSIL commissioned a 7.5 MW captive power plant to

produce electricity from the waste heat of exit gases of its kiln No.2. This
has helped the company to become self sufficient in power. lt has the
potential to sell its surplus power, which is currently pending government
1: approval.

The third kiln with a capacity of 150,000 TPA was commissioned in MaICh
2006'and the present installed capacity of the plant is 390,000 tonnes per
annum. lnstallation of 18.5 MW power plant to utilize waste heat from kiln-1
and kiln-3 is also completed. __-1/,_,r.*1
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The Board'has approved in principle a long term growth plan consistin.g of
adding three more kilns of 1,b0,000 TPA eich to increase the total'ip-lill,e$ .'1
capa.ity to 8,40,000 TPA and also enhance power generation tO, PQ f1j|W i,' t. (, r Irrlld
the future in a phased manner. -'"r-o ,r..3,
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CAPTIVE COAL BLOCK AND PROJECT

Considering the high cost of non-coking coal TSIL was exploring various
alternatives including acquisition of a coal block for ensuring long term
supplies of this vital raw material at considerably lower cost.

Mining Ptan of Radhikapur East (tncluding tJtkal-F) coa! Bock of TATA Sponge lron Ltd. . 1-1

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 Talcher coalfield spread over an area of 1860 Sq.km contains the largest
coal resources of all the coalfields in lndia with a total reserve of 39.635
billion tonnes i.e., 155% of the total coal resources of 255.172 billion tonnes
upto a depth of 1200m in the Country as on 1st January 2007 (As per Coal
Resource Scenario of lndla of CoalWing, Geological Survey of lndia).

Ministry cf Coal, Govt. of lndia allocated Radhikapur (East) coal block in

Angul Dislrict, Orissa on 7th February 2006 for working by M/s TATA
Sponge lr*n Ltd., as Leader, M/s SCAW lndustries Ltd and M/s SPS
Sponge lron Ltd as Associates. The purpose is to meet the coal
requirements for their sponge iron production and captive power generation.

As per tire terms of allocation letter,

Mining Lease shall be obtained in the name of M/s TATA Sponge lron
t-tcl (l-eader) and the entire investment for coal block shall also made
by thr. Leader.
Biock is to be mined by Leader who would carry out mining operations
in accordance with applicabie Statutes/Rules/Orders/Directions
governing mining of coal and any further conditions imposed by or
agreed to by the Central Govt.

Geological Report of Radhikapur East (lncluding Utkal-F) coal block was

prepared by F+lineral Exploration Corporation Limited (MECL) in March 2006
based on exploration data from 59 boreholes drilled by CMPDIL and MECL
over the block area of 10.30 Sq.km.

A total of 183.43 million tonnes of geoiogical reserves has been estimated

in Radhikapur East (including Utkal-'F') Block, out of which 147.87 million
tonnes fall in "Proved" category and 35.56 million tonnes in '"G"
"lndicated"
category. Out of 147 87 mt. proved geological reserves, grade
constitutes 86% and "F" grade 14% of the reserves.
Estimated total opencast reserves are 172.08 million tonnes and total
underground reserves (llB & llA seams) are 11.35 million tonnes in
"lndicated category". Seam lX, the major seam in Talcher coalfield alone
contributes 53.14o/o of total opencast reserves in this block.

The total coal requirement of the Leader and its Associates and their
ultimate satisfaction level is as follows:
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M,'sTATA Sponge lron Linrited (Leader) (45%l .-,,g"tl-,,. o"76',t
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M/s SCAW lndustrres Ltd. (Associate) (36%) ry,t 'l oi1i.r.,'1h0"
M/s SPS Sponge tron ttO. (Aisociate) (19%) ao{|}" $k<6\' 32
Total Requirement 168
Extractable Reserves (Prov. Estimates by CMPDI) 115
Satisfaction Level 68%

MiningPlanof RadhikapurEast(lncludingUtkal-F)CoalBockof TATA Sponge lronLtd. 1-2

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The present proposal consists of exploitation of workable coal seams in
&- Radhikapur East (lncluding Utkal-F) coal block by opencast method upto
& 200-250m depth depending on economic stripping ratio. The deeper thin
seams (llB & llA) would be extracted subsequently by underground i
tF- opencast method depending on their techno-economic feasibility after
reaching the ultimate depth in the present proposal.
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Considering the requirement of coal for existing and proposed sponge iron
0' and power plants of Leader and Associate Companies, M/s TATA Sponge
&d lron Ltd. as Leader proposes to develop an opencast coal mine in this
block.
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The Mining Plan is developed to seek clearances for mining'of coal from
h. Radhikapur East (lncluding Utkal-F) Coal Block based on Geological Report
of the Coal Block prepared by MECL in March 2006.
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Min Mec Consultants Pvt. Ltd. was engaged as consultant for preparation of
Mining Plan and Sri B.D. Sharma as Recognised Qualified Person.
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The mining project would be funded from internal resources of the Lerader.
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Uiig ptu, of Rudt,lkat)* Eusnl,rclrding Utkal-F) Coal tu 8
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