Essar Steel eyes joint ventures in South Africa

Essar Steel is contemplating entry into power, steel and iron ore sectors in South Africa (SA) through joint ventures.

It is likely to initiate talks with Kumba Resources, one of the largest steel making companies in SA, for manufacturing steel from iron fines.

The joint venture is likely to adopt technology from Mintek, a technology supplier and R&D company which acts as a catalyst between Essar and the African companies.

"I am taking a team of experts from Essar to South Africa shortly. We will meet executives from Kumba along with other companies like Iscor, Highweld Steel & Vanadium (HSV), Cisco, and Scow," explained Paul Jourdan, president and CEO, Mintek.

"The team would meet as many as 22 company officials in South Africa for various forms of tie-ups required for the three segments into they are contemplating entry," he added.

"The southern coast of South Africa has large reserves of iron fines which can be converted into steel and then be shipped to India or exported in the international market," Jourdan explained.

"Kumba is one of the possible suitors for Essar Steel to venture into South Africa. Talks are, however, yet to take pace and finer details need to be worked out," he explained.

The South African companies are also eyeing possible tie-ups with Indian companies for better utilisation of resources that are abundant there.

Numerous projects "" from iron ore in Australia and West Africa, coal in southern Africa and Australia, heavy minerals in Madagascar to base metals in China, Namibia and the Democratic Republic of Congo "" are currently under various stages of evaluation at Kumba.

Kumba Resources - formerly a part of Iscor - was split from its parent company Iscor Ltd in 2001. Mintek is also considering the possibility of supplying titanium production technology to Tata Steel's titanium project in South Africa which would be floated in a joint venture with Industrial development Corporation (IDC) of SA.

The idea is to smelt the metal in SA and then ship the bars to India or consumption by Tata Steel. IDC was expected to take a 20 per cent stake in the SA venture.