Tata Steel continues search for resource assets
NEW DELHI, Sept 7 (Reuters) - Tata Steel (TISC.BO), the world's seventh-largest steel producer, is continuing to look for assets, especially coal mines, P. Sengupta, vice president for raw materials at the company, said on Tuesday.
"We will be looking for more coal, definitely, also iron ore," Sengupta told reporters.
Tata Steel, which owns Europe's second-largest steelmaker Corus, has iron ore assets in Canada and Ivory Coast and coal interests in Mozambique and Australia in addition to its domestic operations.
Tata Steel hopes to increase Indian steel production to 16 million tonnes by 2015/16 from around 10 million tonnes by end-2010.
Total steel production in 2015/16 would be around 35 million tonnes, including Europe and Asia.
Managing Director H.M. Nerurkar told the briefing that in Ivory Coast, assets could yield as much as 20 million tonnes of iron ore a year. Tata Steel signed a deal in 2007 with Ivorian state mining firm SODEMI to develop assets at Mount Nimba.
Assessment of the area should yield results by June next year, Sengupta added, with investment "obviously going to be large," if the area lives up to expectations.
The executives declined to give details on investment amounts and said it was too early to discuss financing, although "obviously there will be borrowing of some kind," Sengupta said.
STEEL PRICES
On the outlook for global steel prices in the next three years, Nerurkar said much depended on the price of raw materials.
"Demand for raw materials will continue to be higher than supply, so I don't see those prices falling," Nerurkar said.
"So steel prices should remain at the levels they are at today ... they are controlled by raw materials suppliers."
Several Indian steel firms had raised steel prices this month citing firm global rates and rising input costs. [ID:nSGE68116Z]
India's steel ministry has called for its iron ore exports to be limited to preserve the non-renewable raw material for local industry. [ID:nSGE66D072]
India's top steel producer is state-run Steel Authority of India Ltd (SAIL.BO), but Tata Steel has greater capacity worldwide, mostly contributed by Corus. Tata Steel holds a 27.4 percent stake in Canadian miner New Millennium Capital Corp NML.V.
(Reporting by Jo Winterbottom; editing by Malini Menon)
((jo.winterbottom@thomsonreuters.com; +91-11-4178-1000; jo.winterbottom.reuters.com@reuters.net))
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