Here’s an indication of how serious India’s iron ore problem is.
Some biggies from India’s steel business are reportedly in the running to scoop up the iron ore assets of one of Britain’s largest independent steel trading companies – Stemcor, in India. They include Tata Steel, JSW, Adani Steel and even the employees of Stemcor India themselves.
Like many others, the global economic slowdown has negatively impacted the British firm, and so it now is in talks with banks after defaulting on over US$1 billion in loans. To get over the crisis, the company decided to offload some of its physical assets, which includes an iron ore mine in the Indian state of Odisha. There’s an auction that will be held next month, and analysts say the mine could fetch around US $850 million for Stemcor.
Reports appearing in the Indian media talk of new suitors for this mine appearing every day.
A Press Trust of India (PTI) report said Tata Steel wanted to grab the iron ore to feed its Indian steel mills.
Tata, of course, is not alone. Its rivals Jindal Steel and Power, JSW, and the Adani Group, which is based in Gujarat and has businesses in power, steel and ports, are all actively contemplating bidding for the mine. As the days go by, more and more steel suitors are expected to jump in the fray.
Stemcor’s Indian beneficiation plant takes low-grade iron ore fines from various local mines and refines them. A pellet plant located near local steelmakers converts low-grade iron fines into value-added pellets.
Indian steel producers have been saddled with the problem of sporadic iron ore supply following a ban on its mining in some of the states. No wonder Tata Steel is bidding for the Indian iron-ore assets of Stemcor. Jindal Steel and JSW Steel are also reported to be bidding jointly.
So let’s get to the nitty-gritty by the numbers.