By IANS
New Delhi : The state-owned Steel Authority of India Ltd (SAIL) and Tata Steel will jointly undertake coal mining in India. They agreed here Thursday to set up a joint venture company for this purpose.
“SAIL and Tata Steel Ltd signed an agreement at New Delhi on January 3 to establish a 50:50 joint venture (JV) company for coal mining in India,” Tata Steel informed the Bombay Stock Exchange.
“The JV agreement was signed by SAIL Chairman S.K. Roongta and Tata Steel’s managing director B. Muthuraman,” the company said.
“As India’s steel industry enters a high and sustainable growth phase, raw material availability has assumed critical importance. In order to ensure security of coking coal supplies, it is imperative to augment indigenous coking coal availability.
With both SAIL and Tata Steel having distinct strengths in coal mining, this JV company will generate synergy to ensure security of coking coal supplies for both partners,” the statement quoted Roongta as saying after signing the pact.
Muthuraman said India has very limited reserves of hard and semi-soft coking coal.
“With the Indian steel industry poised for a robust growth, it is imperative for us to utilise this scarce resource in the best possible manner. Both SAIL and Tata Steel have unique strengths and capabilities and we see a strong case to synergise these complementary strengths through this joint venture,” he said.
“The JV company will identify, acquire and develop coal blocks in India,” Tata Steel said.
“Four suitable medium coking coal blocks in the state of Jharkhand with reserves of around 600 million tonnes are under evaluation for this purpose by a joint working group of SAIL and Tata Steel. On allotment of the blocks, the JVC will develop and carry out mining operations for the captive use by SAIL and Tata Steel.”
“Both the companies are expanding their steel making capacities and require secure sources of key raw material inputs like coking coal,” the private steel maker said.