Coal India said on Thursday that it won the Gadadharpur iron ore block in the eastern state of Odisha through a competitive auction.

This marks the state-run miner’s entry into iron ore mining, according to commodities consultancy BigMint.

The block contains 288 million tonnes of resources, the company said in an exchange filing. Coal India will pay the Odisha government a premium equivalent to 114.05% of the value of minerals dispatched from the block.

Odisha is the top iron ore producing state and rising output is expected to support planned steelmaking capacity additions, as well as infrastructure and construction demand.