The government's move to give forest clearance for mining by Steel Authority of India (SAIL) in the Gua iron ore mines in Jharkhand may boost raw material supply for its steel plant.

The company plans to increase the production of iron ore, which is a key raw material for steel making, as part of its steel capacity expansion projects.

The forest clearance may enable the Maharatna firm raise ore output from these mines, spread across an area of 635.986 hectare, from 2.4 mn tpa (million tonne per annum) to 10 mn tpa.

It may be recalled that earlier, the Cabinet Committee on Investment (CCI), headed by the Prime Minister, issued instructions for clearance of the mine to the environment ministry.

Following this, SAIL would invest Rs 3,000 crore and install beneficiation plant and a pallet plant. The firm needs more iron ore to meet its increasing crude steel capacity of eastern sector steel plants by 5.44 mn tpa at an estimated cost of Rs 43,000 crore. Of this investment, the firm has already made an investment of Rs 33,000 crore.

In all, the firm planned to invest Rs 72,000 crore for its expansion and modernisation projects. This includes Rs 10,000 crore for mining activities, Rs 19,000 crore for steel plants at Bhilai (Madhya Pradesh) and Salem (Tamil Nadu).