NextFin News - The ambitious 24-million-tonne integrated steel project by ArcelorMittal Nippon Steel (AM/NS) India in Odisha’s Kendrapara district has hit a significant bureaucratic impasse. Steel and Mines Minister Bibhuti Bhushan Jena confirmed to the State Assembly on Thursday that no formal assessment of the iron ore and mineral resources required for the massive facility has been conducted, despite the project’s approval more than four years ago. The admission raises sharp questions about the logistical viability of what was once hailed as a cornerstone of India’s industrial expansion.
The project, approved in December 2021 with a staggering investment of Rs 1.02 trillion, was designed to be built in phases at Mahakalpada. However, the disconnect between high-level clearances and ground-level resource planning is becoming increasingly visible. While the Industrial Promotion and Investment Corporation of Odisha (IPICOL) has greenlit the investment, the Director of Mines and Geology in Bhubaneswar reports that the essential calculations for raw material security remain outstanding. This lack of data is particularly striking given the scale of the proposed 24 MTPA capacity, which would require a massive and consistent supply of high-grade iron ore to remain competitive.
Minister Jena detailed that while three iron ore mining blocks have been allocated to AM/NS through the auction process, their execution remains uneven. The 228-hectare Thakurani block in Keonjhar and the 139-hectare Ghoraburahani-Sagasahi mines in Sundargarh were leased for 50 years in 2020 and 2021, respectively. Yet, a third allocated block—a 92-hectare site at Allaghat in Sundargarh—has yet to be granted or executed. The delay in securing this third pillar of the company’s captive supply chain adds another layer of uncertainty to the project’s timeline, even as land acquisition by IDCO continues to crawl forward.
The timing of this administrative lag is politically sensitive. Just days ago, BJD MP Sasmit Patra characterized the potential shift of AM/NS interests toward Andhra Pradesh as "sad and shameful" for Odisha. This follows reports that Andhra Pradesh Chief Minister Nara Chandrababu Naidu participated in a foundation stone-laying ceremony for an AM/NS project in his state on March 23. The contrast between the rapid progress in Andhra Pradesh and the "missing" resource assessments in Odisha suggests a shifting gravity in the Indian steel sector, where state-level efficiency is becoming the primary differentiator for global capital.
From a broader market perspective, the lack of a resource assessment is more than a clerical oversight; it is a risk factor for the project’s internal rate of return. Without a clear mapping of ore requirements against captive mine output, the company remains exposed to the volatility of the open market and the rising costs of logistics. While the Odisha government has recently focused on addressing revenue losses from the undervaluation of iron ore—estimated at Rs 4,100 crore—the administrative machinery appears to have neglected the forward-looking planning necessary to anchor its largest industrial bets. The project now sits in a precarious state where the land is being cleared, but the very fuel for its furnaces remains unquantified.
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