November 24: The state-owned Dhaubadhi Iron Limited has finalized the technology for extracting iron from its Nawalparasi-based mine after it was deemed commercially viable to extract ore from the mine.

A report prepared after sending samples of raw materials extracted from the mine to China for studying the prospects of commercial extraction has suggested using electric furnace for extracting  iron.

The report suggested using electric furnace considering the utilization of electricity produced in the country. It is also possible to refine iron by using coal but it would incur additional cost to import coal. Therefore, the state-owned company is preparing to use electric furnace for extraction and refining of iron from the mine.

CEO of the company Krishna Dev Jha informed that China provided them the report about two weeks ago. Jha said that they will opt for electric furnace as per the recommendation of the report.

“We will utilize the resources available in the country and rely less on imported products for extracting iron,” said Jha.

The company is preparing to start the drilling process within the next two weeks (by mid-December) as it has already received the report. It has already selected a consulting firm for the purpose from within the country.

The consulting company will drill between 265 meters to 300 meters in five areas of Dhaubadhi and Pokhari where the mine is located. The quantity of iron which can be extracted from the mine will be ascertained after drilling.

Meanwhile, the company is also preparing to select international consultant company by issuing a public notice for conducting feasibility study and to prepare the detailed project report (DPR).

The company will begin commercial production of iron only after completing all of the above mentioned processes.

CEO Jha informed that the company is preparing to set up a steel plant in Kawasoti of Nawalparasi district. They have already started acquiring 150 bigha land for setting up the factory, according to Jha.

He further informed that 1,500 metric tons of iron can be produced on a daily basis after the company starts production.

Although the government had been announcing financial support for the mine since the last few years, it could not be implemented as the report was yet to arrive from China.

The company has received Rs 250 million during the last fiscal  year while the government has allocated Rs 1.5 billion this year.

The federal government has been looking after the financial matters of the company which has been set up with a total capital of Rs 10 billion. The private sector has 45 percent stakes at the company.

The company was set up in public private partnership model after the government on August 20 decided to open a company specifically for extraction of mines.