BHP woos Tatas for Orissa link-up

BHP Billiton, the $17 billion diversified global resource major, is keen on a tie up with Tata Steel for the latter's proposed six million tonne steel venture and construction of a greenfield port at Dhamra in Orissa.

"We are in touch with Tatas in this regard and sent them feelers," said Don A Carroll, country president, BHP Billiton Marketing Services India Pvt Ltd.

BHP had earlier made a joint presentation with South Korean steel major Posco before the Orissa government for setting up of a 10 million tonne steel plant, coke oven plant and mining of iron ore in the state at an estimated cost of Rs 39,000 crore.

The proposal said, while Posco will set up the steel making facility, BHP will assist the project in terms of assured supply of quality raw material through investment in iron ore mining and metallurgical coke manufacturing.

BHP intended to supply the excess coke and ore, after meeting the Posco requirement, to other steel plants coming up in Orissa. The company also proposed to build a greenfield port at Dhamra.

On the other hand, Tata Steel has proposed to set up a six million tonne steel plant at Duburi and has joined hands with L&T to develop the port at Dhamra.

"We are not exclusively bonded to Posco. We have kept our options open and would like to enter into a tie up with Tata Steel as well", Carroll said.

"Besides, Tata Steel is a major client of ours as we supply about 1.5 million tonne of coking coal to them," he added.

Stating that both Tata Steel and L & T did not have any experience in building and managing a port, he said, they will be better off if they took BHP as a partner.

Carroll said, Orissa being mineral rich, BHP looked at it as a prospective investment center in its global capacity expansion bid and intended to gain a foothold in India's mining sector through the state.

However, BHP's ambitious plan to enter mining activity in Orissa seem to be jinxed due to the current policy of the state government to allot mines to those who intend to go for value addition within the state and not trade in the ore.

In this backdrop, asked if BHP will be keen to just operate mines of either Posco or Tisco only for captive use and not trade in excess ore, Carroll said, the company will weigh the viability of such restricted operation before making any move.

"We want a win-win situation to operate", he said and hoped that in the context of free economy, the Orissa government may relax such stipulations in future.

The steel makers should better utilize their expertise on steel making activity leaving the raw material linkage side to the resource companies for better operation and cost benefits, he added.

Meanwhile, BHP has entered into an agreement with a local mine owner, Sulakhna Mines for mining of bauxite and setting up of an alumina refinery.

The project, with an installed capacity of 1 to 1.5 million tonne of alumina, is estimated to cost about Rs 5000 crore. Meanwhile, BHP has entered into an agreement with a local mine owner for mining of bauxite and setting up of an alumina refinery.

The project, with an installed capacity of 1 to 1.5 million tonne of alumina, is estimated to cost about Rs 5000 crore. The proposed refinery will source bauxite from the Kalarapat mines in Kalahandi district having a reserve of 150 million tonne.