Tata Steel looks at mining acquisitions in the US, Africa, Australia: reports

Arun BaijalTata Steel has identified raw material resources in America, Africa and Australia for acquisition to ensure that around 50 per cent of the requirement of Corus is met through captive sources, reports say.

Corus which is part of the Tata Steel Group, the world's sixth largest steel producer, is continuing to see unprecedented market turbulence in the steel supply chain, with increasing input cost pressures in areas of raw materials.

Last month Australian government sourcdes said Tata Steel was looking for fresh iron ore assets to feed Corus  and was scouting for an iron ore mine in Western Australia. (See: Tata Steel eyes iron ore mine in Western Australia). Australia supplies iron ore and other minerals worldwide, shipping A$53.4 billion of raw materials in 2006-07.  

As Europe's second largest steel producer with annual revenues of around £12 billion and a crude steel production of over 20 million tones, Corus does not have a single captive iron ore mine whereas Tata Steel's Indian operation, has access to captive local  iron ore and coal mines.

With an annual production capacity of 19 million tonne, Corus, mainly imports iron ore from Brazil, which is said to be hurting its performance. The company reported an EBIDTA margin of nine per cent for the year ended 31 March 2008 as against 43 per cent for Tata Steel's Indian operation.

Tata Steel had acquired five per cent stake in Carborough Downs Coal Project in Australia with an agreement to purchase 20 per cent of the project's annual production and entered into a joint venture with Riversdale Mining in Mozambique for $100 million for a 35-per cent stake.