The Hindu Business Line : VSP eyeing joint venture with Australian coal co

VISAKHAPATNAM Steel Plant (VSP), belonging to Rashtriya Ispat Nigam Ltd (RINL), may form a joint venture with the Australian coal major, Anglo Coal, to meet its demands for coking coal.

According to Mr K.K. Rao, Director (Operations) of RINL, a team comprising senior RINL officers would soon be visiting Australia and hold talks with the representatives of Anglo Coal.

"The officials are scheduled to leave for Australia. We have not yet decided on what sort of relationship we would build with Anglo Coal. It would be finalised later," Mr Rao told reporters on the sidelines of the Metals 2004 seminar held recently in the city.

When queried whether RINL would propose a joint venture with Anglo Coal, he said that it was a possibility.

If RINL strikes a joint venture deal with the Australian company, it would be the second PSU to do so after Steel Authority of India Ltd. SAIL had already formed a 50:50 joint venture with another Australian coal major, BHP Billiton.

Both these steel majors are compelled to go in for the joint ventures with global coal giants because they, along with some other Indian steel producers, faced a severe coking coal crisis early this year.

A few months ago, Mr B.K. Panda, the then CMD of RINL, had told Business Line that RINL had earmarked Rs 1,000 crore for investments in mining, both coal and iron ore.

However, at this point of time, RINL is not looking at any iron ore mining blocks. According to Mr Rao, National Mineral Development Corporation is currently supplying iron ore to RINL. "They will have to increase their production a bit," he said.

RINL, currently, does not have any iron ore mines. The company has also worked out a plan for expanding its capacity from the existing level of 3.5 million tonnes per annum to 5 million tonnes by 2008 and then to 10 million tonnes by 2012.

The first phase of expansion will cost Rs 3,000 crore, of which Rs 2,400 crore will be generated internally and the rest likely to be brought in by a partner, who would function on BOT (build-own-transfer) basis. The total expansion plan would cost around Rs 17,000 crore.

More Stories on : Alliances & Joint Ventures | Coal

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