Indian mining majors are aggressively turning up at international centres to bid for billion-dollar coal assets.
They aim to amass properties worldwide to expand their businesses.
MUMBAI: Indian mining majors are aggressively turning up at international centres to bid for billion-dollar coal assets in a strategy to secure their voracious captive requirements.
In a recent instance, challenging the likes of global mining majors BHP Billiton of Australia, ENEL, the largest electricity supplier in Italy, and Ivanhoe, which has considerable mining assets in China, are two Indian-owned enterprises — the Australia-based Aditya Birla Minerals, a part of the Aditya Birla group steered by Kumar Mangalam Birla and Pramod Mittal’s Global Steel Holdings.
Aditya Birla group officials were not available for comment. Aditya Birla Minerals, Australia’s fourth biggest copper producer, owns and operates the Nifty mine in the Pilbara region and the Mt Gordon mine in Queensland. The company was listed earlier this year on the Australian bourses and is a subsidiary of Hindalco. As the rush for ownership of mining assets hots up across the globe, the two foreign entities controlled by Indian business groups appear to be in the forefront to bid for the huge coal blocks in Nigeria.
Nigeria recently announced that it has short-listed 16 companies to bid for 10 state-owned coal fields. The auction of assets is slated to be held on July 24-26. This week, another Indian company — Gujarat NRE Coke — is said to have lost a bid to acquire Excel Coal as a US company, Peabody Energy, outbid the Indian entity and several other mining majors from Australia and China with a bid price of a little less than Rs 9,000 crore.
Coal resources are crucial for Indian companies. As they prepare their blue print to grow exponentially in their aluminium business — in the case of Aditya Birla group — and steel business in the case of M L Mittal and Pramod Mittal - who is coining their own strategy to take a place in the global steel hierarchy now completely dominated by older brother Lakshmi Mittal, who earlier this month had acquired Arcelor SA.
Intense demand for coal from China has kept prices at a high range for the past two years, triggering a rush to secure coal assets from other users.
Securing coal and other ore assets are crucial for the Indian companies as they brace for a demand surge in the coming years. The strategy is clear and was articulated last year at the annual general meeting of Tata Steel by Ratan Tata.
What Tata said revealed what has been in the minds of many corporate captains from the ferrous and non-ferrous industry across the world. Explaining to shareholders the game plan, Tata had said: “The owners of raw materials will be the kings of the industry.”
Those in control of core raw material assets will not only be “competitive” but also “self sufficient” than those without iron ore and coal mines, said Tata, the chairman of the country’s largest private-sector steel firm. Tata Steel’s strategy has always been to own coal and ore mines.
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