The mines ministry has ruled out granting captive iron ore mines for the proposed Ultra Mega Steel Plants (UMSPs) to be set up across the country. The ministry has instead suggested that assured supply of ore can happen through a separate linkage policy. It has made out a strong case for setting up Ultra Mega Mining Projects (UMMPs) to service the needs of steel plants.

The steel ministry had proposed at least four UMSPs of 10 million tonne (MT) each to be set up in Jharkhand, Maharashtra, Chhattisgarh and Orissa. Since such projects would call for huge investments, the ministry’s proposal is to set up a Steel Finance Corporation (SFC) as a special purpose vehicle with an initial corpus of Rs 1,500 crore. The SFC would be conferred the status of a non-banking finance corporation. Each state would have a special purpose vehicle for a UMSP and would part-finance the setting up of such a plant.