The Hindu Business Line : Tata Steel eyeing Africa, Australia for coal mines

TATA Steel, which has envisioned raising its capacity from 4 million tonnes a year now to 15 million tonnes by 2010, has a daunting challenge to meet: Securing uninterruptible supply of a key raw material — coal.

For producing 15 mt of steel, Tata Steel will need about 11 mt of coal. According to Mr A.D. Baijal, Vice-President (Raw materials), at least 7 mt of coal will need to be sourced from outside the country

Last month, the company signed agreement to buy a 5 per cent interest in the Carborough Downs Coal Project located in Queensland, Australia. The agreement gives Tata Steel rights to buy 20 per cent of the production from the project. Mr Baijal says more such agreements were in the offing. "We are looking at 4-5 tie-ups. There are opportunities in Australia and Africa," he told Business Line last week in Jamshedpur.

Meanwhile, the company is also scouting for new technologies for coal beneficiation to improve the quality of coal from its captive mines. Indian coal is high in ash content, sometimes as high as 40 per cent. Tata Steel has four beneficiation plants. One more mine is to be opened shortly and alongside, a coal washery would also be set up.

"It is not so much as the number of beneficiation plants as the technology used that is important," Mr Baijal said. He added that the company's R&D would analyse the coal and depending upon its characteristics, would source the right technology. Mr Baijal said that in the next few months, a new technology for reducing the ash content of coal would be tied up for.

At present, Tata Steel is able to bring down the ash content of its domestic coal to 14 per cent. "We expect this to go down further," Mr Baijal said. Around 60 per cent of the company's coal consumption comes from domestic sources.

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