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Tata Steel to foray into merchant mining

09 Mar 2012 Evaluate

Tata Steel’s century-old mining operationshave been solely put to the company’s use. But, with assets becoming more andmore capital-intensive, the steel major is now charting out options to extractmaximum value.  For instance, Tata Steel, is in the process of completing a feasibilitystudy on New Millennium Iron Corp’s Taconite Project, which is potentially thelargest mining project in Canada. The capital cost of the project, whichincludes significant infrastructure cost, will be to the tune of $4.4 billion.A power transmission line will have to be built and the fine concentrate isexpected to be pumped via a 700-km slurry pipeline to the port.

This Taconite is a huge deposit and theinfrastructure spend is so high, you mining just two-three million tonnes isnot feasible. The company will have to either mine 10-15 million tonnes to meeteconomic feasiblity. So, if they are able to market it, it will have to look atmerchant mining. If the merchant mining business materialises, Tata Steel willjoin the likes of the Anil Agarwal group, that is well ensconced in the metalsand mining space. Tata Steel has a century of experience in sourcing rawmaterial mainly in iron ore, coal and chromite. Company-owned and operatedmines and collieries have since its inception met most of the raw materialneeds of the company’s steel works. The raw materials division raises 14million tonnes of ore from its captive collieries, iron ore mines and quarriesspread over the states of Jharkhand and Orissa.

Tata Steel Share Price

210.15 -1.90 (-0.90%)
20-Apr-2026 11:02 View Price Chart
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