Tata Steel, SAIL form JV for coal mining

Tata Steel today announced it has signed an equal stakes joint venture agreement with Steel Authority of India (SAIL), for coal mining activities in India.

According to an official release issued by Tata Steel to the BSE today, the JV agreement was signed by S K Roongta, chairman, SAIL, and B Muthuraman, managing director, Tata Steel.

Four suitable medium coking coal blocks in the state of Jharkhand with reserves of around 600 million tonne are under evaluation for this purpose by a joint working group of SAIL and Tata Steel. On allotment of the blocks, the JVC will develop and carry out mining operations for the captive use by SAIL and Tata Steel. Both the companies are expanding their steel making capacities and require secure sources of key raw material inputs like coking coal.

Tata Steel and SAIL had also hiked steel prices this week due to a 10% rise in raw material costs of iron ore and coke during the past few months.

After signing ther agreement, Roongta said: "As the country's steel industry enters a high and sustainable growth phase, raw material availability has assumed critical importance. In order to ensure security of coking coal supplies, it is imperative to augment indigenous coking coal availability. With both SAIL and Tata Steel having distinct strengths in coal mining, this JVC will generate synergy to ensure security of coking coal supplies for both partners."

On his part, Muthuraman said: "India has very limited reserves of hard and semi soft coking coal. With the Indian steel industry poised for a robust growth, it is imperative for us to utilise this scarce resource in the best possible manner. Both SAIL and Tata Steel have unique strengths and capabilities and we see a strong case to synergise these complementary strengths through this joint venture."