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Tata Steel, SAIL form venture for coal mining

— PHOTO: R. V. MOORTHY

MAXIMISING SYNERGY: S. K. Roongta (left), Chairman, SAIL, and B. Muthuraman, Managing Director, Tata Steel, exchanging the documents in New Delhi on Thursday after signing a joint venture agreement for coal mining.

NEW DELHI: The Steel Authority of India Steel Ltd. (SAIL) and Tata Steel on Thursday announced a 50:50 joint venture for cola mining within the country.Initially, four coal blocks have been identified and necessary steps for securing them would begin. Investment to the tune of around Rs. 3,000 crore for development of each block would be called for.

“This is a significant step for both companies which need coking coal for their current and future production needs,” Tata Steel Managing Director B. Muthuraman said after inking the agreement with SAIL Chairman Sushil Kumar Roongta in the presence of senior officials of the two companies.

“It (the cooperation) may extend to iron ore mining and steel making later. But as of now, we are beginning with coal,” Mr. Muthuraman said, while denying there was cut-throat competition between the two in the domestic steel market.

“You can work for each other’s advantage. Competition does not mean that you kill your competitor. Interestingly, even though we are in competition we discuss market scenario and other issues,” he elaborated.

Indicating his willingness to extend cooperation with SAIL to other areas, the Tata Steel Managing Director said, “Sometimes, I think these two companies should have started many other things because the cultural compatibility between both is high. I wonder why we did not do things together earlier.”

Echoing similar sentiment, Mr. Roongta said there was nothing wrong if both companies explored mutual opportunities in coal mining as Tata Steel had the requisite expertise for mining coal.

Mr. Muthuraman said four medium coking coal blocks in Jharkhand having reserves of around 600 million tonnes were being evaluated by a working group comprising officials of both companies.

“On allotment of the blocks, the joint venture will develop and carry out mining for captive use of both companies with an estimated investment of about Rs. 10,000-12,000 crore,” Mr. Muthuraman said.

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