Indian enterprises plan to jointly operate mines abroad

Indian enterprises plan to jointly operate mines abroad

According to market reports, Coal India Ltd (CIL), Tata Steel and Steel Authority of India Ltd (SAIL) are intending to buy mining leases particularly in Australia, Indonesia and South Africa through a company in which all three companies will have shares. Coking coal prices have been improving over 50% within the last six months and are expected to rise further as of the beginning of the second quarter, mainly due to the current shortage of this material worldwide. Besides, freight rates have also risen during a few couple of months. Thus, in order to secure supply of the subject material at a lower cost, aforecited companies decided to work out the problem by jointly operating mines. Meanwhile, in the next fiscal, SAIL is planning to expand its liquid steel capacity by 1 million tonne from its current level of 12 million tonne and the company will need over 13 million tonnes of coking coal. 65% of its total coking coal requirement has to be imported which is expected to cost SAIL more than Rupees 30 billion (around $682 million).