New Delhi, ArcelorMittal India Pvt Ltd (AMIPL) on Thursday said it has commenced mining operations at its Thakurani iron ore mine in Odisha's Keonjhar district.

According to the company, the Thakurani block, with estimated reserves of around 179 million tonnes, will make a valuable contribution to AM/NS India's long-term raw material requirements.

AM/NS India is a joint venture between ArcelorMittal and Nippon Steel.

"The block has annual production capacity of 5.5 million tonnes, which can be scaled up to 8 million tonnes and its mineral reserves are expected to increase once detailed exploration is complete. AMIPL subsequently signed a Mine Development and Production agreement, executed a lease deed with the state government and has since acquired all valid rights, approvals, clearances and licenses," the company said in a statement.

In February, the AMIPL was selected preferred bidder for the Thakurani iron ore mine license following an auction process conducted by the Odisha government, in which AMIPL agreed to pay a 107.55 per cent premium per tonne, as well as other royalty and duties, ensuring strong revenue contribution to the state.

"The ore produced at Thakurani will feed AM/NS India's steel manufacturing facilities and support our long-term ambition to significantly grow our production capacity in India with a secure, integrated supply chain. Over time, our plan is to connect Thakurani to our plants in Odisha through a slurry pipeline, which ensures both a cost effective and environmentally friendly mode of mineral logistics," Dilip Oommen, CEO, AM/NS India was quoted as saying in the statement.

"We recognise our responsibility to the local communities around the mine and are committed to safe, sustainable operations to earn their trust. "