New Ventures – Growth through Collaboration

The Tata Steel Group’s growth and globalisation strategy is driven by achieving growth while maintaining profitability and mitigating risks. With the focus in 2007-08 being on enhancing the raw material security in the short and long term, the Tata Steel Group announced major joint ventures in Mozambique, Ivory Coast, Oman and India. The Company continues to look for suitable downstream projects in geographies of interest, to add value to its steel.

Vietnam Steel Project
Tata Steel signed two Memorandums of Understanding (MoU) with Vietnam Steel Corporation (VNSTEEL). The first is for a proposed steel complex with an estimated capacity of 4.5 million tonnes per year. Tata Steel already has a Joint Venture with VNSTEEL in Rolling Mills through NatSteel, which is a Singapore based subsidiary of Tata Steel. Additionally, Tata Steel in co-operation with VNSTEEL is undertaking a feasibility study for the Cold Rolling Mill Project. On the successful completion of the study and financial closure, Tata Steel will have a stake of 65% while VNSTEEL will have a stake of 35% in the CRM Complex.

Established in 1995 by a merger of Metal Corporation and Steel Corporation, VNSTEEL is Vietnam’s largest steel company and has various manufacturing plants and a distribution system across the country. The total capacity of VNSTEEL including that of its Joint Ventures is around 2.2 million tonnes with a product mix ranging from crude steel, high quality construction steel to sheet and plate products serving other economic sectors.

Iron Ore Project in Ivory Coast
Tata Steel and SODEMI (State Owned Company for Mineral Development in Ivory Coast), entered into a Joint Venture agreement in December for the development of Mount Nimba Iron ore deposits in Ivory Coast (West Africa). The project will be implemented by a Joint Venture company Tata Steel Cote d’ivoire, wherein Tata Steel will have 75% equity. The Mt Nimba deposit, spread over 3 countries – Liberia, Guinea and Ivory Coast is one of the biggest iron ore deposits in West Africa. Through this venture, Tata Steel will introduce best practices in mining, geology, environment and project management. It is the Tata philosophy to participate and be a part of a country’s development process and Tata Steel will make a positive impact on improving the quality of life of the people of Ivory Coast.

The initial phase will involve exploration and detailed feasibility assessments followed by opening of the mine and installation of beneficiation facilities. The iron ore from this project will be supplied to Tata Steel Group facilities especially those located in the United Kingdom and the Netherlands.

Coking Coal Project in Mozambique (Riversdale)
Tata Steel and Riversdale, a company listed on the Australian stock exchange signed a Joint Venture agreement in November for coal tenements held by Riversdale in Mozambique. Through this, Tata Steel acquired 35% interest in Riversdale’s Benga and Tete licenses. Tata Steel has also secured rights for 40% share of the coking coal produced. The Joint Venture Company has so far discovered JORC compliant inferred resource of 1.9 billion tonnes. The coking coal derived from this project will be supplied to the Tata Steel Group’s facilities in Europe, Asia and elsewhere.

Limestone Project in Oman
Limestone is a key raw material for producing good quality steel. Tata Steel has been sourcing limestone from Central India, Thailand and Middle Eastern countries for its Indian operations so far. In order to reduce dependence on purchased limestone, Tata Steel signed a Joint Venture agreement with the members of the Al Bahja Group, a leading business house in Oman in January. Tata Steel has a 70% stake in the Joint Venture. The project envisages mining of limestone in the Uyun region which lies in the Salalah province of Oman and has large deposits of limestone. Exploration work has begun.

Coal Mining Project in Australia
Tata Steel has a Joint Venture with Vale in Australia for a Coking Coal mine. Tata Steel and Vale, along with other Joint Venture partners have undertaken a large scale expansion of the Carborough Downs Coal Mine near Moranbah in Central Queensland in Australia. This decision on expansion of production gives Tata Steel an opportunity to explore larger areas for coal deposits that will be a potential source to meet part of the Company’s raw material requirement and enhance the long term competitiveness of its global operations. The project is currently estimated to have a life of 14 years and approximately 58 million tonnes of raw coal is expected to be mined during this period. There is a further potential resource of 100 million tonnes of raw coal in the unexplored areas and deeper seams. The clean coal envisaged to be produced will be low-ash coking coal and PCI coal, highly suitable for iron making.

Tata Steel – SAIL Joint Venture for coking coal properties
Tata Steel has signed an equal stakes Joint Venture agreement with Steel Authority of India (SAIL), for coal mining activities in India. Four suitable medium coking coal blocks in the state of Jharkhand are under evaluation for this purpose by a joint working group of SAIL and Tata Steel. On allotment of the blocks, the Joint Venture will develop and carry out mining operations for captive use by both SAIL and Tata Steel.