The steel ministry has decided to broadbase the mandate of International Coal Ventures (ICVL) by allowing it to buy iron ore mines also overseas. The move is part of the government?s bid to ensure supply of sufficient raw materials for domestic steelmakers apart from reserving the existing raw materials in the country for future use.
ICVL is a special purpose vehicle created by five PSUs?NTPC, Coal India, NMDC, SAIL and Rashtriya Ispat Nigam to buy coal assets abroad. Under the new mandate, the company will explore acquisition opportunities in other minerals including iron ore. This would serve twin objective of conserving national resourses and building strategic reserves of minerals that could be used to feed the growing needs of the steel sector.
?The time has now come that we need to go out and acquire mining rights. The public sector companies should aggressively bid for coal and iron ore assets abroad. We would allow ICVL to bid for iron ore mines also,? steel minister Virbhadra Singh told FE.
The minister said the domestic steel industry was on firm footing and needed assured raw materials supply. He stressed that besides large steel-producing companies a number of smaller firms are planning to add capacity from 2,000 tonne to a million tonne in the coming years. ?All this means that the current comfortable iron ore situation on the domestic front could soon turn into a deficit. Acquiring ore resources abroad would come handy in this situation,? said a steel ministry official.
At present, India produces just over 200 million tonne of iron ore per annum, half of which is exported into the spot market in China. The steel ministry has said exports of ore should be stopped to prevent national resource from being used by the steel industry of other countries.
While ICVL is being asked to expand its mandate, sensing the emerging situation private sector companies such as Jindal Steel and Power, Essar Steel, Ispat, JSW have already gone ahead and picked up stake in iron ore resources in overseas markets. State-owned mining company NMDC has recently begun exploring acquisition option for iron ore mines while SAIL is exploring opportunities for setting up steel units abroad in places that gives its control of input resources.