The second phase of work has started in the country's largest iron mine, with about half of the Indian iron ore market declining
The Department of Mines and Geology has started the process to set up a factory after ascertaining the amount of iron coming out of the Dhauwadi iron mine at East Nawalparasi-Hupsekot. Narayan Banskota, a geologist at the department, said that the department had started the process after the Chinese laboratory informed that the mine contained iron that could be used for industrial production.
In the first phase, the amount of iron within 10 km east-west area will be ascertained. For this, tender will be called this week to ensure the quantity by drilling 100 to 300 meters in 5 different places. He said that the department will find out the results within six months by starting the drilling work from next September.
According to Banskota, in the second phase, land acquisition for the iron mine area and establishment of a factory will be taken up. Preliminary reports have come from experts that the area around Hupsekot, which has an iron mine, and the Hattikhor area in Kawasoti Municipality-1 would be suitable for setting up a factory. The department has decided to move ahead with both the works (mining area and factory establishment) as soon as the quantity is confirmed.
As the largest iron mine ever discovered in Nepal, it has aroused enthusiasm among the locals.
Once the quantity of iron is confirmed, work will begin on the cost that can compete with the current market price. Technicians have started work saying that 800 to 1200 tons of iron can be extracted from here daily. It will be a medium-sized industry to extract the same amount of iron. Preliminary estimates put the production at 20 million tonnes. Drilling will find out how much iron is under the ground.
Preliminary research has shown that the demand for iron will decrease by 25 to 30 per cent of the raw material imported from India after the start of the factory. The main challenge for the Indian market is to compete on price and reduce costs. According to the department, a team of experts from the Ministry of Industry and Finance has started work on the cost as it has to compete with the big steel mills in India.
Though the government has formed Dhauwadi Iron Mining Company Limited, the coordinator Shobha Kant Poudel has been promoted to the post of secretary and moved to Karnali. The committee will have one representative each from the Department, Ministry of Industry, Ministry of Finance and Ministry of Physical Resources. A source in the Ministry of Finance informed that the government is thinking of representing the private sector and issuing shares. The Gandaki state government is also planning to invest a few percent shares.
Laxmi Pandey, chairperson of Hupsekot village municipality, said that they are excited by the news that industrial production will start soon from the iron mine. He said that this would open the door for the development of Hupsekot. She said that the village municipality is working with priority for iron mine excavation and industrial production.
Meanwhile, Chinese laboratories have proven that iron and steel can be extracted from mines. Last August, 5 tonnes of iron ore from the mine was sent to China for testing. Ram Prasad Ghimire, director general of the department, said that the metallurgical report on the test was encouraging. ‘Now the report on the percentage of iron in the mine will come this week. Then the production process moves forward, 'he said.
The Ministry of Finance has allocated sufficient budget in the current fiscal year under various headings (road, electricity, feasibility study). Iron production will start from there within two and a half years, said Ghimire.
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