The Hindu Business Line : Vizag Steel in talks to buy coal mines abroad

VIZAG Steel Plant is exploring the possibility of setting up a joint venture overseas with a view to owning some coalmines abroad. Talks in this regard have already been initiated with 2-3 companies in Australia, according to Mr B.K. Panda, Chairman and Managing Director.

Speaking to newspersons, Mr Panda said that the move to own iron ore and coal mines in India and coalmines abroad is aimed at combating the problem of serious shortage of raw material faced by the steel plant. The board of directors has already cleared a proposal for a joint venture abroad to own coalmines. The green signal from the Centre is awaited. Mr Panda said that Vizag Steel Plant was faced with an acute shortage of coal and coke. While an order for import of coke has been firmed up, a request has been made to the Union Ministry of Steel for acquisition of iron ore and coal mines. On account of a shortage of raw material inputs, production has been curtailed in major production units. Efforts are being made to source raw material from both indigenous and imported sources.

However, such a move would impact the profitability as input costs are expected to go up by about Rs 1,200 crore in the current fiscal. The board has also cleared a proposal to expand the steel plant's capacity to five mt of liquid steel per annum by 2007-08. The proposed expansion would entail an expenditure of around Rs 3,100 crore.

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