Kolkata, Nov 30: Faced with acute shortage of iron ore, state-owned Vizag Steel plant has decided to acquire captive mines for smooth running and applied to both Orissa and Chhattisgarh governments for taking over some reserves. "We have identified some iron ore reserves in Raoghat in Chhattisgarh and Malantoli in Orissa and applied to both the state governments for acquiring them," chairman-cum-managing director of Vizag Steel B K Panda told.

Both Raoghat and Malantoli, he said, had reserves of 200 million tonne each which could sustain the plant for a long period.

Panda said VSP had also moved the steel ministry for the acquisition of iron ore mines for the plant. Another public sector company, Steel Authority of India Ltd, had captive iron ore mines in Jharkhand, Orissa and Chhattisgarh, while private sector Tata Steel had assured supply from its captive mines.

The acquisition of iron ore mines was all the more important for VSP which has chalked out an ambitious expansion plan to increase capacity to 10 million tonne by 2020.

Currently, VSP required over six million tonne of iron ore for producing 4.3 m.t of hot metal. Its requirement would go upto 15 m.t when it attained 10 m.t capacity.

He said cost would also be an important factor in the near future as the NMDC which now supplied iron ore to VSP was pressurising the plant for hiking the price of ore. VSP`s outgo on account of iron ore now stood at around Rs 550 crore every year. Bureau Report