| Last year saw some of the biggest deals in the steel sector, led by Tata Steel which acquired Corus for $12 billion. |
| Close on its heels, Essar Steel Holdings acquired Ontario-based Algoma Steel for $1.8 billion and then Minnesota Steel, a US-based steel company which controls more than 1.4 billion tonnes of iron ore resources for $100 million, while JSW Steel acquired three companies in the US for close to $1 billion. |
| With the acquisitions and mega expansion plans in place, the companies are now gearing up to repeat the same in the iron ore and coking coal segments. |
| With iron ore prices set to rise 30-50 per cent and coking coal 15-20 per cent this year, the deals are being pursued with a hurry. |
| Tata Steel, JSW Steel and Essar Steel are already on the job. Tata Steel has entered into a joint venture agreement with Sodemi (a state-owned Ivory Coast mineral development company) for development of Mount Nimba Iron Ore deposits. |
| Tata Steel has also submitted a bid for the Western Cluster Iron Ore deposits in Liberia though the company has refrained from commenting on it. |
| On the coking coal side, the world's sixth largest steelmaker has signed a joint venture agreement with Australia's Riversdale Mining to set up a special purpose vehicle to develop a hard coking coal and thermal coal project at Riversdale's key exploration tenements in Mozambique. |
| More deals are expected as Tata Steel is eyeing raw material security of 50-60 per cent over the next three-four years. |
| JSW Steel, which has a 30 per cent iron ore security, is currently exploring the possibility of acquiring a Latin American iron ore company. |
| Speaking about the proposed acquisition, Seshagiri Rao, director-finance, JSW Steel, said, "The ore was of low grade. The ore could be beneficiated and brought up to a level of more than 60 per cent and even then it would work out to be cheaper than buying ore at spot prices." |
| Moreover, getting a mine allocation back home had become a time-consuming affair. Rao said it took the same amount of time to get a low grade mine as getting a high grade mine (65 per cent) in India. In contrast, it was easier getting a lower grade deposit outside India. |
| On the coking coal front, JSW has secured mines in Africa and scouting for mines in Australia. |
| JSW has lined up an expansion plan to achieve a capacity of 30 million tonnes by 2020. |
| Similarly, Essar Steel has set it self a target capacity of 20-25 million tonnes spread across Hazira, Chhattisgarh, Jharkhand and Orissa in India by 2012. There are also plans of setting up a greenfield project in Trinidad and a rolling out a facility in Vietnam. |
| According to the Essar Steel spokesperson, the company is scouting for mines in Indonesia. |
| Essar has also got a prospecting licence for a iron ore mine in Jharkhand, which is under litigation. |
| Industry analysts said availability of mines even outside India was an issue. Also, the trend of going for raw material cover was not restricted to India. All global companies are looking for captive resources to bring down the cost of production and increase competitiveness. |
| "There is a problem of too many bidders and too few resources," said industry sources. |
| However, for now, it seems that the domestic steel companies have set themselves big targets and the new year could see some significant activity in the raw material space. |
| TREASURE HUNT |
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