New Delhi: Ispat Industries’ promoter Pramod Mittal-owned Global Steel Holdings Ltd has signed up mining leases for iron ore and coal reserves in Brazil, Colombia and Mozambique.
A GSHL spokesman confirmed the development to PTI saying it has signed multiple iron ore leases with Brazil and for thermal and coking coal exploratory blocks with Colombia and Mozambique.
While the spokesman refused to confirm the quantum of iron ore reserves in Brazil saying that it is substantial, informed sources told it could be 500 to 750 million tonnes.
The spokesman said it may take 12 to 18 months to complete exploratory works in Brazil after which they will decide on beginning exploratory activity.
In Colombia and Mozambique, the total coal reserves is estimated to be around 100 to 110 million tonnes of medium to high-grade coking and non-coking coal.
The Mozambique project is near to Arcelormittal, Tata Steel and CVRD coal projects in Tete region on the African nation. GSHL has bagged a coal mining lease of around 30,000 hectares in that country as compared to ArcelorMittal’s 45,000 hectares and Tata’s 25,000 hectares.
GSHL’s subsidiary Ispat Industries which operates a 3 million tonne steel plant in India may join hands with their parents and local partners by floating Special Purpose Vehicles in each of these nations.
Ispat officials, however, did not wish to comment on the development. Ispat Industries does not have any captive mining resources in India and such a move may benefit the company in the longer term.
Informed sources said that Ispat may pick up around 30-40 per cent of equity in these SPVs for its assured captive resources.
Ispat is currently planing to expand capacity at Dolvi in Maharashtra to 5 million tonnes per annum and is looking at greenfield ventures in Jharkhand, other states and closer to captive mining resources, sources said.
GSHL which operates steel plants in Philippines, Bulgaria and Nigeria is increasingly on the hunt for captive natural resources for steel-making and associated business.
Most Indian steel companies have intensified their search for raw materials in the overseas to meet their future production and capacity expansion plans.
Chinese steel companies too are doing the same as they are the biggest buyer of global iron ore and other minerals. These companies are expanding their steel capacities at a vigorous pace.