Ispat Industries is set to pick up 40 per cent stake in iron ore and coking coal mining companies in Brazil, Columbia and Mozambique through the joint venture route. Speaking on the sidelines of the company’s annual general meeting, Pramod Mittal, chairman, said that it was too premature to comment on the iron ore reserves.
The Brazilian mines have iron ore reserves of 300-500 million tonnes, while the Columbia and Mozambique mines have coking coal deposits in the range of 60-70 million tonnes. Ispat would have access to the mining output in proportion to its shareholding in the JVs.
When asked whether the foreign mining assets would cater to Ispat Industries or Global Steel Holdings, which is the holding company for foreign steel operations, Mittal said, “We will try to maximize value.”
Ispat has leases to mine iron ore deposits worth 80-120 million tonnes in Maharashtra. In Madhya Pradesh, the company has coking coal leases for reserves of about 70 million tonnes.
Ispat would have access to captive raw material sources over 2-3 years. The company did not have captive mines till date and depended on long-term agreements for iron ore and imports for coking coal.
Apart from mining assets, Ispat would invest Rs 3,200 crore for setting up a coke plant, pellet plant and power plant. The projects would be completed in two years. The company has achieved financial closure for a Rs 800 crore power plant, Mittal said.
The company is increasing the hot-rolled capacity at its Dolvi plant from three million tonnes to 3.6 million tonnes and adding 1.25 million tonne blast furnace to meet the metallic requirements.
Source: Business Standard