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Tata, SAIL will tango more

Tata Steel and Steel Authority of India have indicated that their coal-mining venture could be precursor to more such joint collaborations.

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Steel majors enter into coal mining joint venture

NEW DELHI: Tata Steel and Steel Authority of India (SAIL) have indicated that their coal-mining venture could be precursor to more such joint collaborations even in their core business areas of iron ore mining and steel making.

The country’s two biggest steel producers entered into a coal mining joint venture with the signing of a joint venture agreement in New Delhi on Thursday.

The coming together of the two could also mean a consolidation in the domestic steel sector, especially with regard to taping raw material sources.

Asked whether the two companies could form joint venture for iron ore and steel making, Tata Steel managing director B Muthuraman said, “It (collaboration) may extend to that. New areas are not ruled out…We are open to collaboration. Today, it is coal mining. Tomorrow, it can be some other area…But as of now, we are beginning with coal.”

Showing a willingness to co-operate, he said, “Sometimes, I think these two companies should have started many other things because the cultural compatibility between both is high. I wonder why we did not do things together earlier.”

The joint venture company will identify and develop coal blocks in India. It is eying four medium sized coking coal blocks in Jharkhand with reserves of around 600 million tonne for development and production. The blocks are currently with the government-owned Coal India Ltd.

“On allotment of the blocks, the JV company will develop and carry out mining for captive use of both the companies with an estimated investment of about Rs 10,000 to Rs 12,000 crore,” Muthuraman said.

The joint venture will have an initial paid-up equity capital of Rs 2 crore but may need to raise more money when operations begin.

Adding to the friendly assertions, SAIL chairman S K Roongta said there was nothing wrong if both the companies explored mutual opportunities in coal mining as Tata Steel had the requisite expertise for mining coal.

Muthuraman ruled out Tata Steel joining the recently approved venture for procuring imported coking coal of which SAIL would be one of the promoters.

jyoti_m@dnaindia.net

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