State-run steel producer Steel Authority of India (SAIL) and mining major NMDC will invest INR260 crore in developing the Arki limestone reserves in Himachal Pradesh.
Business Standard reported that the two Public Service Undertakings (PSUs) today entered into a joint venture agreement aimed at starting production from the 100Mt reserves in next three years.
"The companies will together invest INR260 crore in development of the mines," Steel Minister Virbhadra Singh told reporters here.
Giving details, NMDC Chairman Rama Som said that the modalities of the JV will be worked out and a "task force for the purpose has been set up".
"In three years time, we will aim to produce 2Mta of limestone from the reserves," he added.
Arki reserves are rich in steel-grade limestone used in steel making. SAIL, being the JV partner, will have the right over the limestone lumps produced from the mines, which will minimise its dependence on imports of the mineral.
"At present, we require 1.6Mtof limestone. We meet the requirement domestically as well as through imports. With our ongoing capacity expansion, the limestone requirement is pegged to go to 3Mt in next few years," SAIL Chairman S K Roongta said.
However, he maintained that SAIL would keep the "option open" to import limestone which will heavily depend on the "freight rates".
SAIL is undertaking INR70,000 crore expansion project to take its annual steel production capacity to about 23 million tonnes from about 14 million tonnes at present and would be a ready consumer of limestone lumps.
The limestone fines from the mines are likely to be sold to cement manufacturers like Ambuja Cement and Jaypee Cement.