SAIL-BHP For Joint Ventures In Coal, Iron Ore Mines

Kolkata, June 29 | Updated: Jul 1 2004, 04:18am hrs
Steel Authority of India Ltd (SAIL) is set to form two separate joint venture companies with Australian mining major BHP for developing a coal mine in Australia and an iron ore mine in India.

The board of the government-owned steel major has agreed in principle to form these two joint ventures to ensure coking coal and iron ore supply to its four integrated steel plants at Bhilai, Bokaro, Durgapur and Rourkela along with its wholly-owned subsidiary Indian Iron & Steel Company (Iisco).

SAIL plans to increase its hot metal production from the present 12.7 million tonne (mt) to 20mt by 2012. As a thumb rule, 1.4 tonne of iron ore sinter and 1.1 tonne of coking coal is required to make a tonne of hot metal.

The board has agreed in principle on JVs. The modalities of the JVs will be finalised soon, Bhilai Steels managing director RP Singh told FE. Mr Singh is also on SAIL board.

BHP has agreed to form a joint venture with SAIL for mining coal in Australia but made it conditional that it has to be taken as a partner in another joint venture which would be mining iron ore at Chiria in Jharkhand.

The SAIL official said that BHP had offered SAIL 20 per cent stake in coal JV, while keeping 80 per cent with it. In case of iron ore JV, it had proposed 50:50 partnership with SAIL. BHP has agreed to pump in funds and most modern mining equipment for Chiria.

BHP has proposed that both the JVs would first meet the requirments of SAIL plants as weell as Iisco and sell the surplus to others.

It has also proposed to provide financial and technical support to SAIL for setting up new coke oven batteries. SAIL would need them when it would embark upon implementing its proposed capacity enhancement.

The leasehold for Chiria iron ore reserve, the second largest in the world, is now with Iisco and will expire on June 30. Union steel minister Ram Vilas Paswan, SAIL chairman VS Jain, Bokaro Steels managing director UP Singh and Iiscos managing director HMP Singh met Jharkhand Chief Minister Arjun Munda and requested him to renew the lease in favour of SAIL.