The JV will focus on African countries like Angola and Namibia and central Asian countries like Kazakhstan and Uzbekistan to bid for gold and diamond mines, besides acquiring coal and iron ore mines.
The board of Tata Steel, which met on Wednesday, has approved the proposal to form a JV with MMTC. While Tata Steel will hold 74% stake in the venture, MMTC will have the balance 26% equity. MMTC is taking the proposal to its board on April 17.
Confirming the move, the minister of state for commerce and power, Jairam Ramesh, who was in Angola last week, said, The governments of Angola and Namibia have already offered a diamond mine each to India for exploring and developing. Considering that we are the largest importer of gold and diamond, this provides us with an excellent opportunity.
Sources close to the developments said the JV will also focus on non-ferrous metals and other minerals which India imports. The JV will be the main company for all such projects. However, each project will be taken up separately and an individual company will be set up for implementing each project. The concrete details are yet to be worked out and the process may take 2-3 months, an industry source revealed.
MMTC, an international trading house of the Indian government, had already revealed its plans to acquire coal mines in Indonesia and Australia, besides its interests in acquiring coal mines in India. The company is a leading importer of coal for the country's power utilities and steel plants.
A number of mining companies, having leases for coal mines, have offered MMTC a stake in those mines. The company has been mulling importing steam coal from Indonesia and metallurgical coal from Australia.
The Tata group has also been scouring the globe for natural resources to secure supplies. Tata Steel has entered into an MoU with Riverdale Mining in Australia. Under the agreement, Tata Steel would acquire a 35% interest in two of Riversdales key Mozambique exploration tenements.