Now, coal-rich Mongolia on Indian steel majors’ radar

Close on the heels of deciding to venture into Afghanistan for exploring the Hajigak iron ore mine, domestic steel giants have now set their sights on coal-rich Mongolia.

The International Coal Ventures Limited (ICVL), a special purpose vehicle (SPV) of mineral and metal PSUs, is all set to put forth a pre-qualification bid to develop the western block of Tovan Tolgoi coal deposits in Mongolia. At the behest of the steel ministry, the ICVL has nearly finalised the details for putting up the bid.

In course of a recent meeting, convened by the top brass of the mines ministry to ascertain the interests of domestic steel giants to invest in Mongolia, steel secretary P K Mishra asked ICVL chairman C S Verma to venture ahead and respond to Mongolia’s offer to Indian companies in putting up the bid. An estimated investment of Rs 10,000 crore would be required to operationalise the mine and expand the choked railway infrastructure there.
Verma, who is also chairman of Steel Authority of India Limited (SAIL), told the meeting that the current mining lease of the said coal mine was valid for only 15 years and since there was a ceiling of 47 per cent for foreign direct investment, ICVL may have to rope in a local partner.

ICVL is seeking to ensure to ensure imported metallurgical coal supply of at least 10 per cent of 2019-20 requirements of SAIL and RINL (around 5 million tonnes per annum) from overseas assets.

Verma and other representatives of the ICVL said that due to inadequate infrastructure in Mongolia, coal could be evacuated either through China or Russia by railway and thereafter ports.

At the meeting, mining secretary S Vijay Kumar assured all possible help to facilitate companies for submission of the pre-qualification bid. “Submission of the bid will give a foothold and pave way for further dialogue and smaller issues could be subsequently resolved,” he told representatives of ICVL and other steel firms, according to the minutes of the meeting.

A Tata Steel representative suggested that his company was open for a consortium approach for the bid and suggested that services of RITES and Indian Railway Construction Company Limited could be utilised for development of infrastructure and Tovan Tolgoi. A senior ministry of external affairs official said that the Mongolian Parliament is vested with powers to approve grant of mineral concessions and the country’s government was squarely dependent on it for vetting all proposals.

Source:www.indianexpress.com