Melbourne: As Indian steel companies are looking at long-term contracts for iron ore, global mining behemoth Rio Tinto said it has been approached by several manufacturers for the raw material.
“We’re getting interest from Indian steel mills who are saying they would like to try it (Rio’s iron ore) for their plants,” Rio Tinto’s Managing Director for sales and marketing division Ian Bauert said in an interview with ‘The Australian’ in Perth.
Last month, the company saw its net earnings more than doubling to $6.9 billion in the first half of current year, propelled by spiralling commodity prices and increased demand for its products in the growing economies, including India and China.
The Britain-based firm expects Indian steel sector to grow at a rapid pace on the same lines with its neighbour China, which is the world’s largest steel maker with over 400 million tons of annual production.
India produces 55 million tons of steel annually and hopes to cross the 120 million tons mark by 2012.
“Indian steel production could take off like China’s,’’ said Bauert. “While reforms are needed, many mills are already being planned near the coast which would give them easier access to sea-borne iron ore,” he said.
Iron ore is an essential raw material needed in the process of manufacturing steel. Indian steel companies, in their efforts to cut costs, are looking towards backward integration and enter into long-term contracts with the miners.