Indian steel-makers are buying Australian mines to overcome the increase in coking coal prices.
The head of India’s biggest steel firms has warned it will be “very aggressive” in purchasing foreign assets,The Sydney Morning Herald is reporting.
The Indian government believes steel is vital for its economic growth, and is leading the push to buy up mining operations in Australia, and strongly encouraging private companies to follow.
The Steel Authority of India is in negotiations to buy mines in South Africa, as well as Australia and is believed to be spending $1.5 billion in stakes in three mines.
Coking coal has more than doubled in the past year, from $US 125 a tonne to almost $US 300 and the state-owned Steel Authority wants to gain more control over the price it pays for coking coal by investing in the operations.
Its chief executive, C S Verma has confirmed negotiations are occurring, and the talks are believed to already be quite advanced.
Verma said more Indian companies will bid for Australian mines.
”The time has come for a larger interest as we are expanding capacity,” Verma told Indian media.
”We don’t have the luxury any more to choose mines … so opportunities will have to be taken up.”
He told the Herald: ”We are going to be very aggressive in securing assets outside India.”
Verma said they plan to use the recent weather impacts on mining operations in Queensland to their advantage and invest in coking coal there.
India imports over 20 million tonnes of coal per year and is one of Queensland’s biggest importers, so the damage to mining operations has affected them more than most.
”We are at the verge of another coking coal crisis because of heavy flooding in Australia. I think it is a good time [to buy].”
The full impacts of the floods on the mines in Queensland is not expected to be known for some time.
The Alpha Coal Project and Kevin’s Corner in the Galilee Basin are reportedly being eyed off by Indian firms.
Bids of almost $2 million have apparently been submitted by Essar and GVK Power, but have not been confirmed.
Last year Indian infrastructure group Lanco Infratech acquired the assets of the failed Griffin Group and Adani Enterprises purchased a mine from Linc Energy.
Image: The Australian