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Tata Steel in talks to buy coal mines in western Canada

23 Mar 2011 Evaluate

For the purpose of raw material integration for its European operations, the company has initiated talks with the government of British Columbia, a Canadian province, to acquire coking coal mines. British Columbia is the western-most of Canada's 10 provinces and is very rich in coking coal. Tata is keen to acquire a coking coal mine for its European operations, which have zero raw material integration. Coking coal prices continue to go up, pressurizing the margins for the company.

On Tata Steel Europe's raw material integration, iron ore from its Canadian DSO project is expected to reach its mills from 2012 onwards. So is coking coal from the Benga project at Mozambique. Tata Steel has 100 per cent offtake at the DSO project, which will be producing four million tonnes of iron ore every year from 2012. The company has a right over 35 per cent of coal production at Benga, which is expected to begin with five mt coal production from next year.crackcrack

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