Essae group plans to invest $3-5 billion in exploration depending on the results.
The Group plans to invest $3-5 billion in exploration , go for full-scale mining licence Ruias-led Essar Group has bagged a mineral concession in north Brazil, which will cater to the iron ore requirement of its proposed 2.5 million tonne steel plant in Trinidad and Tobago in the South Caribbean. Confirming the development, Essar Group CEO for steel project in the Caribbean P.R. Dhariwal said: ?This is part of the company"s effort to secure raw material sources.?
As part of the concession granted by Departmento Nacional de Producao Mineral (DNPM), Government of Brazil, Essar would conduct exploratory mining for iron ore, manganese ore and other minerals in 7851.69 hectares in the state of Amapa.
The Group plans to invest $3-5 billion in exploration over two years and, depending on the results, go for full-scale mining licence.
Iron ore resources of Brazil would be Essar"s second international raw material deposit. In 2007, Essar Steel had acquired Minnesota Steel, which has over 1.4 billion tonnes of iron ore resources in the Mesabi range.
The area that Essar has earmarked for exploration in Brazil is 150 km from the Sanatana public port in Macapa, on the banks of the Amazon, which is close to the site of its proposed steel plant.
Essar Group sources said that the financial closure for the steel project in Trinidad and Tobago has not yet taken place, but the investment could be around $1.5 billion.
Besides expanding overseas, Essar Steel is augmenting the production capacity of its steel plant at Hazira, Gujarat, to 10 million tonnes from the present 4.6 million tonnes by 2010.
The company has also lined up steel and power projects in Orissa and Jharkhand. It has been allocated iron ore reserves and coal mines in Chhattisgarh, Jharkhand and Madhya Pradesh. At present, Essar Steel is meeting its iron ore requirement from state-run miner NMDC.