Ispat to mine iron ore, coal abroad for self-use

Kolkata, Aug 28 : Steel maker Ispat Industries Ltd will mine iron ore in Brazil and coal in Columbia and Mozambique through joint ventures to meet its raw material requirements, a top company official said here Thursday.

"The Brazil mine has a reserve of 300-500 million tonnes, while the Columbian mine has an estimated reserve of 60-70 million tonnes," Ispat chairman Pramod Mittal said on the sidelines of the company's annual general meeting.

"In both these mines, we will have a share of around 20-30 percent," said Mittal.

Additionally, the company has been licensed to mine iron ore near Nagpur in Maharashtra. It is also assessing reserves at a coal mine in Madhya Pradesh.

Ispat has planned an investment of Rs.3,200 crore (Rs.32 billion) over the next two years for building a 110 MW power plant, pellet plant, coke oven plant, direct reduced iron unit enhancement, and capacity augmentation of the existing plant, Mittal said.

It is building coke oven plant with an annual production capacity of one million tonnes, along with a pellet plant with an annual capacity of two million tonnes, at the Dolvi steel complex in Maharashtra.

Ispat is also increasing the capacity of its existing hot rolled coil plant from three million tonnes to 3.6 million tonne, with an additional blast furnace with an annual capacity of 1.25 million tonnes.

To cope with the shortage of natural gas, the company has tied up with the state-owned Oil and Natural Gas Corp, and would source gas from Bombay High that would meet 30 percent of its requirement, Mittal said.

Ispat, meanwhile, announced a net profit of Rs.35 crore (Rs.350 million) in 2007-08, compared to Rs.10 crore (Rs.100 million) in 2006-07.