Mineral security pivot: Steel ministry orders SAIL, NDMC to acquire critical assets abroad

The move highlights the Indian government’s clear shift towards having its own mineral securitization program through ownership of mines and assets, rather than relying on imports. This would shield entities from geopolitical fluctuations, ensuring uninterrupted supplies, and also reduce import bills for some key raw materials used to make steel.

The two entities, both under the ministry of steel, are exploring acquisitions and partnerships for active and operating mines, or even virgin ones for which pre-feasibility studies that suggest commercial activities can commence. Companies can look at forming consortia to fund these purchases or buy them directly if necessary, two ministry officials and two executives from these companies told Mint.

“The ministry’s directions to the two large CPSUs are: go out and secure mineral blocks, and not just regular offerings such as coal and iron ore, but limestone, critical minerals and so on," one of the ministry officials cited above said.

'Increasingly critical'

Dhruv Goel, CEO of Big Mint, a commodities market intelligence firm, said, “The government wants Indian companies to own strategic mineral assets overseas. As a country, we need to secure resources globally because these minerals will become increasingly critical over the next decade. The government now views these investments as long-term strategic bets rather than quick-return projects. If a good opportunity comes up today, the idea is to acquire it even if the benefits may take years to materialise."

He added, “This push is aimed at securing coking coal, limestone, copper, gold, lithium and other critical minerals. These may not seem urgent today, but they will be vital in the next 5 to 10 years. So when an overseas opportunity comes up, the thinking is clear: we should invest.".

China has already been doing this for years and serves as a useful benchmark, he said, adding that strategic assets it bought across Africa and South America a decade ago are delivering returns today. Private Indian steelmaker JSW Steel has interests in Mozambique and Australia, while Jindal Steel’s mining interests cover Mozambique, Australia and South Africa.

Both SAIL and NMDC own coking coal and iron ore mines in India. Coking coal mines operated by SAIL include Tasra, Jharia and others in Jharkhand, Chattisgarh and Odhisha. It also has 15 iron ore mines including Kiriburu, Meghahatuburu, Gua and Chiria in these three states. NMDC, the country’s largest iron ore merchant miner, operates mines in Chattisgarh (Bailadila) and Karnataka (Donimalai and Kumaraswamy). It also owns the Panna diamond mines in Madhya Pradesh.

Scouring the globe

So far, NMDC teams have visited Senegal to explore limestone blocks; Chile and Argentina for lithium, gold and silver blocks; Indonesia for coking coal mines; and Ras Al-Khaimah in the UAE for limestone blocks, the second ministry official said. They have also tapped Indonesia for coking coal assets.

During an investor call in May, NMDC chairman and managing director Amitava Mukherjee said the company was actively scouting overseas for coking coal blocks and other minerals. “We are actively looking for assets abroad and we are evaluating many assets, which obviously cannot be discussed in the public domain," he said.

“Our diversification and international policy is very clear… we’ll be looking at 10 minerals only, of which met coal or coking coal is one of the most important ones. Apart from that, we’ll be looking at copper, lithium, cobalt, nickel, gold and bauxite," Mukherjee added.

He also said the company sees a big opportunity in coking coal as a miner, adding, “It is one of those minerals where we have been mandated to look very closely and aggressively."

SAIL has also been asked to look for low-silica limestone blocks while exploring larger supply options from Stevin Rock LLC, one of the world's largest quarrying companies, owned by the government of Ras Al-Khaimah. It supplies high-quality limestone, dolomite, and gabbro for various industries worldwide.

Typically, limestone and dolomite are added during steelmaking to remove impurities from molten iron by forming a waste layer called slag. Dolomite also adds magnesium, which helps protect the furnace lining, making the process smoother and more efficient.

Simultaneously, SAIL has been asked to ramp up on its Mozambique coal blocks, prepare a capital expenditure plan, and ensure improved supplies, an executive said. It owns coking coal mines in the African nation through a special purpose vehicle that has five members – SAIL, NMDC, Rashtriya Ispat Nigam Ltd (RINL), NTPC and Coal India.

For context, block or supply expansion plans in Mozambique have been under consideration for some time, but have been stuck mainly because SAIL’s own capex plans have slowed down due to its high debt — around ₹33,663 crore as of 30 September. Mozambique coking coal block expansion could be at least a ₹200-crore project, a SAIL executive said, requesting anonymity. NMDC, meanwhile, has no debt.

The UAE push

Around June and July this year, Union steel minister, HD Kumaraswamy visited the UAE seeking partnerships for green steel manufacturing and to secure global mineral assets. His visit coincided with SAIL and NMDC setting up their respective overseas arms for mineral trading or securing assets in Dubai.

At a meeting at Ras A-Khaimah on 30 June, dialogue centred around securing long-term access to low-silica limestone, exploring green hydrogen and green steel collaboration, establishing calcined lime production units in the city. A day later, at another meeting with the UAE’s minister of economy, discussions centred around leveraging Dubai as a platform to build international mineral supply chains.

SAIL, NMDC and the steel ministry are yet to respond to Mint’s queries.

NMDC’s Australia bet

Beyond Mozambique, NMDC expanded its overseas footprint to Australia through its subsidiary Legacy Iron Ore in 2012, when it acquired a majority 50% stake in the company. While it has begun mining operations there, this activity is currently limited to gold, with production underway at the Mount Celia Gold Project. Legacy also holds iron ore and other mineral tenements in Western Australia, but these remain at the exploration and development stage, with no commercial iron ore mining yet. A search for lithium there is yet to bear fruit.

On Legacy’s profit expectations, the NMDC chair said during the May earnings call that the company was hopeful the entity would “also be showing good profits" in the current financial year.