NMDC in talks to buy coal mines in Russia

Country's largest iron ore producer NMDC on Wednesday said it is in talks to buy coking coal mines from Kolmar in Russia to feed its proposed steel plants in Chhattisgarh and Karnataka.

When contacted, NMDC CMD Rana Som confirmed that talks are on, but said, "the Kolmar's coal mines are one of the many coal assets NMDC is looking at and nothing has yet been finalised.

"No final view has been taken regarding the Kolmar coal mines," he added.

Coking coal along with iron ore are the two vital inputs for steel making. The coal mines are understood to have an estimated reserves of 400 million tonnes.

A senior company official said that NMDC is evaluating a number of properties across the globe and a deal would depend on several factors like prices, transportation cost an logistics issues, among others.

The PSU has been trying to acquire mining assets overseas for the last few years to secure raw material supplies for its steel making business.

NMDC along with two other companies has already submitted a $230-million non-binding bid to buy 70 per cent stake in an Australian mine owned by Perth-based Atlas Iron.

Also, the company is looking for acquiring coal assets through International Coal Ventures Ltd--the consortium of five leading PSUs, including SAIL, NTPC and RINL.

The firm is also looking at developing iron ore mines in Africa in joint venture with world's largest steel maker ArcelorMittal.

NMDC had yesterday said that it is partnership talks with Japan's Nippon Steel for a Rs 10,000-crore (Rs 100 billion) project in Karnataka, and with Kobe Steel for another project in Andhra Pradesh.

The company has proposed to set up a 2-million tonne per annum (mtpa) plant in Karnataka. Besides these JVs, NMDC plans to commission its 3-mtpa integrated steel plant in Chhattisgarh by 2014.

The miner is investing Rs 3,400 crore (Rs 34 billion) to augment its annual iron ore production to about 41 million tonnes from around 22 million tonnes at present.