Mumbai, India — 09 March 2012 – In future Indian industrial giant Tata Steel will derive 10% of its coking coal requirements from Australian-based Rio Tinto’s Benga coal mine in Mozambique.
Revealing this in an interview with Bloomberg News, Tata Steel managing director H.M. Nerurkar said the first year’s shipments from the Benga coal mine were expected to total about 700,000t. Tata Steel has an annual coking coal requirement of 6 to 8Mt, he added.
Tata Steel has a 35% stake in the Benga coal mine, and the imported coking coal will help the company lower its raw material costs.
“Benga coal will be a positive trigger for the European unit and we will definitely see improvement in operational margins after supplies start,” sJatin Damania, an analyst at SBI Capital Markets Limitedin Mumbai, told Bloomberg News. “The company’s effort to seek raw material integration will bear fruit gradually,” he added.
The Benga project, which Rio Tinto bought from Riversdale Mining last year, will start production in the first half of this year.
Source: Bloomberg News. For full item click here.