Already running about six months behind schedule, a Rs 607 crore expansion project of state-run miner NMDC at Bailadila in Chhattisgarh is set to be delayed further after Naxals burnt part of a conveyor belt meant for evacuating the raw material from the new mine.
The Bailadila 11B deposit is very crucial for NMDC in its efforts to achieve 50 million tonnes per annum (mtpa) capacity by 2018-19. The project, slated to be commissioned by March this year, will have a capacity to produce seven mtpa iron ore.
"As part of plan to enhance production, the construction of Deposit 11B mine at an expanded capacity of seven million tonnes per annum has been taken up. The estimated capital expenditure towards this is Rs 607 crore. Naxal activities have seriously hindered the progress of the project work," NMDC said in its Annual Report.
Out of the proposed investment, Rs 320 crore was meant for plant and the remaining Rs 187 crore was earmarked for mining machineries.
Naxals had in March this year burnt the downhill conveyor of 11 B over a length of 500 meters, which was scheduled to take trial run in May.
The project is now expected to start production by the end of the current fiscal.
NMDC also said the major risk the company is facing is the threat of Maoists' attacks on and around its project at Bailadila on and off.
"Such attacks have made some impact on production which has affected the movement of ore from the Bailadila sector. The company is in contact with the Government agencies for support and protection of its people and installations," it said.
The initiatives taken by the Chhattisgarh Government and the Central Government are expected to address the risk at the earliest, it hoped.
NMDC has been operating four mines in Bailadila sector of Dantewada district and cumulatively, they produced 5.7 MT iron ore in first quarter out of its total 7.8 MT production during the April-June period of the current fiscal. The company has also mines in Karnataka.
NMDC is also building a slurry pipeline for transportation of pellets from Bailadila to Vizag via Jagdalpur with provision of partial off-take at Nagarnar, the location for its proposed three million tonnes per annum steel plant in Chhattisgarh.
It has also applied for seven PLs (Prospecting Licences) in Dantewada district and is pursuing the Pls with the Chhattisgarh government.
NMDC had registered its highest ever production and sales in last fiscal at 30 million tonnes and 30.5 million tonnes respectively.