SAIL bids for Mongolian coalfield, may set up plant
State-run Steel Authority of India Ltd is one of the top 15 global steel and mining companies vying for part of Mongolia's Tavan Tolgoi coal fields, widely regarded as one of the world’s-largest coal deposits with reserves of over 6-billion tonnes of high grade coking and thermal coal.business Updated: Feb 03, 2011 23:05 IST
State-run Steel Authority of India Ltd is one of the top 15 global steel and mining companies vying for part of Mongolia's Tavan Tolgoi coal fields, widely regarded as one of the world’s-largest coal deposits with reserves of over 6-billion tonnes of high grade coking and thermal coal.
Separately, SAIL is also in talks to set up a 3 million tonne steel plant in Mongolia with an investment of atleast Rs 13,500 crore.
SAIL is bidding for the mines through the government special purpose vehicle— International Coal Ventures Ltd (ICVL), and is competing with two Japanese consortia led by Mitsui and Itochu groups, the world's largest steelmaker ArcelorMittal and Brazilian mining giant Vale, US coal miner Peabody and Xstrata are also in the race.
“We want to become a global company and to do that we need sufficient raw material linkages,” said C S Verma, chairman,SAIL.“Right now we require around 14 million tonnes of coking coal per annum, 10.5mt of which is being imported. We want to atleast partially offset that by acquiring coal reserves overseas.”
ICVL is a two year old consortium of government owned firms such as SAIL, Coal India Ltd, NTPC, NMDC and RINL formed with the goal of owning atleast 500 million tones of metallurgical coal reserves by 2020.
Last month ICVL decided not to bid for Australian miner Riversdale where Tata Steel is a significant shareholder. So far ICVL has not closed a single deal largely because of ot being a government owned entity.
“Besides this bid, we are also simultaneously interacting with the Mongolian government and have offered to set up a 3-million tonne steel plant as a separate project,” said Verma. “The government will have to provide land, iron and coking coal for the plant and we will make the overall investment.”
SAIL’s bid for Mongolian coal and the steel plant follows its new found zeal to branch out overseas. It ventured into Indonesia last month, where it signed a MoU with the Indonesian government to develop mineral deposits in the central Kalimantan region.