JSW steel has offered to surrender one of its four iron ore mines it procured through e-auctions last year at high premiums, according to local media.
In a notice to the Director of Mines on Aug 11, the steelmaker said it was unable to operate Gonua iron ore mines in the Sundargarh district because of low grade ore and logistical problems.
The company intended to surrender the entire area of the Gonua iron ore mines with effect from Aug 12, 2022, according to a formal notice to the government.
The miner had executed the mining lease deed on June 27, last year and started mining operations on July 1.
Gonua iron ore block is an operational mine with an estimated reserve of 118mn mt.
In an aggressive bidding, the company had emerged as the preferred bidder for the mine with an offer to pay a premium of 132pc.
The steelmaker with a production capacity of 18mn mt per annum has also procured Nuagaon iron ore with the highest reserve of 792.93mt, Narayanposhi iron ore with a capacity of 190mt and Jajanga block with a capacity of 39.42mt.
JSW steel has decided to set up a greenfield steel project of 12mt per annum near Paradip in Jagatsinghpur district at an investment of over Rs530bn.
JSW could also give up its right to Jajanga mines for similar reasons, where the company failed to achieve Model Mine Development and Production Agreement (MDPA) under which the mine owner must produce a minimum of 80pc of the average production of the last two years.