Steel Authority of India Ltd., the nation’s second-largest producer, is seeking to purchase at least two coking coal mines in Mongolia, which holds the world’s largest deposit of the steelmaking raw material.
Steel Authority, in talks to build a $3 billion factory in the land-locked North Asian country, aims to buy one mine itself and another through a venture with other state-run metal and energy companies, Chairman C.S. Verma told reporters today in New Delhi. The company asked the Indian government for bi- lateral assistance for the mines, he said, without giving details about the size, location or time of investment.
Mongolia, which shares a border with China and Russia and has some of the world’s largest untapped mineral reserves, is seeking developers to help it feed demand for raw materials from its neighbors, while maintaining control over the deposits. The Tavan Tolgoi region holds more than 6 billion metric tons of coal in the deserts of southern Mongolia.
International Coal Ventures Ltd., in which Steel Authority holds a 26 percent stake, has bid for a Mongolian block estimated to hold 1 billion tons of coal, Steel Secretary P.K. Misra said on Jan. 31. As much as 70 percent of the deposit may be coking coal, he said.
India’s biggest steelmakers Tata Steel Ltd., Steel Authority and JSW Steel Ltd. are seeking mines overseas following a surge in the price of coking coal. Steel Authority, which imports about 70 percent of its requirement, is paying 66 percent more for the fuel this financial year than last year, based on the benchmark prices.