Thursday, July 21, 2005
Tata Steel buys 5% in Australian coal mine
Our Bureau / Kolkata July 19, 2005
Tata Steel signed an agreement with AMCI Australia Pty Ltd to buy a five per cent interest in Carborough Downs Coal Project in Queensland, Australia.
The move was in tandem with Tata Steel’s plans of increasing steel making capacity. The company has chalked out ambitious growth plans by setting up greenfield plants or acquiring capacities in India and overseas.
The company has also signed an offtake agreement for a proportion of the production over life of the project.
The agreement was signed by Brian MacDonald, managing director, AMCI Australia Pty Ltd, T Mukherjee, deputy managing director (Steel), Tata Steel and AD Baijal, vice president (raw materials).
The Carborough Downs coal project is majority owned and operated by a subsidiary of AMCI Holdings Australia Pty Ltd, AMCI International AG, the apex holding company of AMCI Holdings Australia Pty Ltd, which is a large global producer, shipper and trader of high-grade metallurgical coal.
Carborough Downs is an undeveloped underground coking coal project with production scheduled to commence in 2006. It is located in Bowen Basin in central Queensland.
The project life is estimated at 14 years and approximately 58 million tonne of raw coal is expected to be mined during this period. There is a further potential resource of 100 million tonne of raw coal in unexplored areas and deeper seams.
The clean coal envisaged to be produced will be low-ash coking coal suitable for steel making. Industry sources said the move was strategic and would cater to Tata Steel’s expansion of capacity.
The company produces five million tonne of steel per annum at its Jamshedpur plant and has recently invested in NatSteel Asia, which has a capacity of about 2 million tonne per annum of finished steel.
The company has plans to establish steel manufacturing units in Iran and Bangladesh. In India, Tata Steel has signed MoUs with the governments of Orissa and Chhattisgarh for setting up a steel plant in each state.
The Tata Steel scrip today increased 1.65 per cent on Bombay Stock Exchange and closed at Rs 362.85. On the National Stock Exchange, the scrip increased 2 per cent and closed at Rs 362.55.
Volumes were at 15,43,356 and 33,49,604 on BSE and NSE.
GOING PLACES
* The move is in tandem with Tata Steel's plans to increase steel making capacity
* The project life is estimated to be 14 years and about 58 mt of raw coal will be mined during the period