Kathmandu: The administrative processes have reached the final phase for the extraction of the iron ore deposit at Dhauwadi hill in Hupsekot Rural Municipality-5 of the east Nawalparasi district.

With a view to extracting iron from the mines at Dhauwadi, the government has established Dhauwadi Iron Company Limited. The office of the company at present is located at the premises of the Department of Mines and Geology, Lainchaur, Kathmandu.

Chief Executive Officer of Dhauwadi Iron Company Limited Dr. Janak Bahadur Chand informed that the government had successfully got tested some five tons iron ore of Dhauwadi mine by Sichuan Institute of Metallurgical Geology and Exploration, Chengdu, China, for estimating the amount and quality of the iron that can be extracted from the Dhauwadi iron ore.

Chand said that the feasibility study will be conducted again. A letter of intent for the evaluation of data will be published at the international level in the coming week. It will estimate the requirement of the labors, costs and nut bolt

According to Chand, the volume of iron in the range of 10 km from east to west will be estimated in the first phase. Five drillings will be carried out at different locations for this purpose. He shared that four drillings have been completed so far.

He also informed that the Financial Regulations and Administrative Rules related to the extraction have been sent to the Ministry of Industry, Commerce and Supply, which will then be sent to the Ministry of Finance.

The government has been moving forward to extract iron from 41 square km of mines found in the Dhauwadi area for the last four years since the iron ore was discovered. The initial estimation showed that the mine has the potential of 20 million tons of iron

The data required for the extraction is ready.

Chand said that once the extraction begins, it will reduce 25 per cent to 30 per cent of imports of the raw iron from India. However, reduction of cost and competition with the market price of iron in India will be the main challenge

According to the study of geologists, 58 per cent of iron can be extracted from the iron raw material of Dhauwadi mines. 60 per cent hematite in iron ore is considered a good composition for running an iron ore. Hence, the government has given due priority to extracting iron from the ore at Dhauwadi.

Chand said that a tender will be announced for extraction after the report from China is finalized. The foreign company will begin extraction as no company in Nepal seem to be capable to extract the iron. The number of households that will be displaced from the mining works will be known once a detailed project report (DPR) is prepared, he said.