In a bid to feed its upcoming steel and power projects in Gujarat, Ruias-promoted Essar Group is scouting for iron ore and coal assets in Africa and South America for possible acquisition.
"Our merger and acquisition team has been mandated to look for iron ore and coal assets both abroad and in India for acquisition," a company official told PTI.
Essar Group is scouting for raw material assets in Africa and South America, he said, adding, "however it is not in the race to acquire United Coal, the US-based firm that is now on the block."
Since acquiring raw material assets have become dearer and a number of companies are looking for assets worldwide, he said it may take a little while to reach to a negotiation.
Increased demand for coal and iron ore has caused an unprecedented increase in the price levels of both the commodities. Iron ore prices have gone up by 400 per cent since 2004 and coaking coal prices by 500 per cent during the same period.
Essar has a 4.6 million tonne per annum (mtpa) steel making facility at Hazira in Gujarat. The plant does not require coal since it produces the commodity using arc furnaces.
The Group, however, has now embarked on a capacity expansion programme taking it to close to 10 mtpa in which it intends to use a combination of blast furnace, corus and arc furnace technologies almost in the same ratio. Coal would be required in blast furnace and corus technologies.
