The Chhattisgarh government is planning to put on hold allotment of the Kawardha iron ore mines till the assembly elections, which are slated for November this year.

Besides the world's largest steel-making company, ArcelorMittal, Tata Steel [Get Quote] and three other companies are in the race to get control over the iron ore mines in Kawardha, about 120 km from the state capital of Raipur. The company winning the bid to mine 100 million tonnes of iron ore in Kawardha will have to set up a steel plant.

"As of now, we have kept the matter pending and any decision on the allotment of the iron ore mines in Kawardha is likely to be taken after the state assembly elections," Chhattisgarh Mineral Development Corporation Chairman Gourishankar Agrawal said.

The mines had been allotted to CMDC, which invited proposals from private companies to form a join venture for mining and value addition to the mineral within the state.

Initially, about 30 companies had showed interest in the iron ore assets in Kawardha. But, later, only eight companies submitted their proposals. Ispat Industries [Get Quote] and Bhusan Steel were disqualified after the bids were opened in early August. Besides ArcelorMittal, Tata Steel, Sarda Energy and Minerals, Adhunik Steel and Jai Shree Balaji Steel are left in the race. 

JSW pulled out of the race last week, stating that the process of allotment of mines was unnecessarily delayed.

CMDC withheld the result even after completing the marking process based on the bid proposals submitted by the company.

"Since the marking process was completed, CMDC should have issued the letter immediately and allotted the mine as it was not possible that none had qualified," said a senior executive of a company in the race.

Highly-placed sources said ArcelorMittal had topped the list, followed by Balaji Steel and Sarda Energy. ArcelorMittal had proposed to set up 6 million tonnes per annum plant in the state according to the bid conditions as the others in the race were either coming up with the projects or already had a facility in the state.

"The state government is willing to give the mines to a local company and this is the reason why the entire process has been put on hold," sources revealed.