|SAIL CMD CS Verma|
A CONSORTIUM led by Steel Authority of India Limited (SAIL) is set to buy coal mines overseas in the next few months from Indonesia, Mozambique and the United States. Most steel producers in India, the world's No 3 coal importer, depend on overseas coal shipments and have been trying to buy mines in Africa and Europe. In a related development, a high-level panel has asked the state-run steel major to look into possibilities ...of strengthening presence in global market by setting up offices abroad. The Kalyan Banerjee-headed panel in its latest report has asked the Maharatna PSU to look for possibility of opening international marketing offices in order to increase its global presence in line with Rashtriya Ispat Nigam Ltd (RINL).
The panel has said that exports by SAIL are likely to go up in coming years.
“SAIL maintains a strategic presence in foreign markets and has been exporting around 3-5 per cent of its saleable steel production during last few years. With higher production capacities of SAIL plants post expansion and modernisation, share of exports is likely to go up in future," the Parliamentary Standing Committee on Steel and Coal has said.
The panel has praised RINL saying its products are well accepted in the international market.
"In order to tap new market, RINL is proposing to open its first international market office at World Trade Centre at Colombo, Sri Lanka," it said.
JSW Steel Ltd, India's third-largest steel maker, has already bought US mines that produce the coal used in steel making. Some other private companies have also acquired mines in Australia.
India's demand for steel making coal is expected to triple by 2020/21, with about 90% of that coming from abroad.
"We're doing due diligence in three to four geographies such as Indonesia, Mozambique and the United States," said Ajay Mathur, chief executive of International Coal Ventures Ltd (ICVL), the consortium led by SAIL.
Mozambique is logistically quite well suited for India, Mathur told reporters in Goa.
"Whatever has come out of Vale and Rio's (operations) from Mozambique looks to be of good quality," he said, referring to the commodity giants' mines in the African nation.
ICVL, whose five participating firms are all state-owned or state-controlled, has been scouting for mines since 2009 but has not been able to buy any yet as it is looking for big mines that can produce at least 50 million tonne per year.
ICVL is close to buying coal assets in Poland. This was confirmed by CS Verma, chairman of SAIL and ICVL.
Verma said SAIL would raise coal imports by 6 million tonne to 18 million tonne in the next two and a half years as the PSU boosts its steel making capacity to 24 million tonne from 17.5 million tonne.
SAIL has an ambitious expansion plan and it is investing Rs 72,000 crore to enhance capacity by around 10 million tonnes per annum (MTPA) to 24 MTPA.
The ongoing expansion is likely to be completed next fiscal.
With a turnover of Rs. 49,350 crore, the company is among the seven Maharatnas of the country's CPSEs. SAIL has five integrated steel plants, three special plants, and one subsidiary in different parts of the country.