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SAIL close to Buying Mines in Oz; to setup $2.9 bn plant in S Africa

24 Feb 2011 Evaluate

Steel Authority of India is in advanced stages of signing agreements with coking coal miners in Australia and South Africa. The value of the mines — two in South Africa and one in Australia — could likely be upward of $1.5 billion (about 6,750 crore) and would be used to reduce SAIL’s import bill. The steel maker buys about 10.5 million tonne of coking coal every year from Australia and Africa and could likely spend more as it has plans to expand its capacity. 

SAIL’s negotiations are being done through International Coal Ventures (ICVL), a consortium of five state-run companies that pool resources to bid for mines overseas. SAIL has a 26% stake in ICVL. 

On the other hand, it has agreed with Afripalm Resources Ltd to build a $2.95-billion South African steel plant. The mill will have a capacity of three million to five million metric tonnes a year and may take four to six years to build. As part of the agreement, Afripalm will begin distributing Steel Authority's products in Africa.crackcrack

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