Aug. 21 (Bloomberg) -- A venture of Tata Steel Ltd. and state-run Steel Authority of India Ltd. is seeking to buy coking coal mines, preferably in Australia, according to a tender document on its website.
S&T Mining Co., as the venture is called, is looking to acquire assets or sign a long-term purchase agreement with mines, except those located in Russia, Mongolia and Mozambique, the document said. The tender sought expressions of interest from consultants willing to arrange the transaction or owners willing to sell.
The tender document didn’t give a reason for why the company excluded the three countries from the list of investment destinations. Kamal Kishore, listed as the S&T Mining contact in the tender document, Steel Authority spokesman R.K. Singhal and Tata Steel’s Kulvin Suri didn’t immediately respond to e-mailed questions.
Indian steelmakers depend on imports for more than half of their coking coal needs, exposing them to greater supply risks and price volatility. The foreign currency loans taken for overseas purchases also bares the steelmakers to foreign exchange risks.
S&T Mining is seeking assets with resources of more than 100 million metric tons and an annual production capacity of more than 2 million tons that are ready to start output in one to two years, according to the tender document. Applications are invited by Sept. 10.
International Coal Ventures Pvt., a consortium of five Indian state-run companies including Steel Authority, last month agreed to acquire Rio Tinto Group’s stake in coal mines in Mozambique for $50 million.
Benchmark coking coal prices for three months started July touched a six-year low of $120 a ton.
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