Tata Steel is bringing together its mining activities under a single vertical to be called Tata Steel Mining. The vertical will include Tata Steel Alloys, the steelmaker's wholly-owned subsidiary that recently bagged chrome ore mines in Odisha.
"Tata Steel Mining will be the vehicle for all mining activities. The company will participate in mining auctions under Tata Steel Mining," said Global CEO and Managing Director, TV Narendran.
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The new vertical is part of the overall re-organising drive at the country's oldest steelmaker, and also includes closing down units and selling non-core businesses.
Post the recent second-quarter results announcement, Narendran had added the company is consolidating domestic business units into four verticals - long products, downstream, mining and infrastructure.
"We are also re-organising our domestic footprint in four verticals to drive scale, synergies and simplification which will create additional value for our stakeholders," PTI quoted him as saying.
The consolidation process may take another nine months. The company aims to close down 100 units and has already filed for the liquidation of 50.
Century-old miner
Tata Steel is the oldest miner in the country, having pioneered iron ore mining over a century ago, just like it did in steel making. It has over 13 mining sites, mostly spread across in Jharkhand and Odisha.
Thanks to its considerable presence, the company mines 100 percent of its iron ore requirements, and about one-fourth of its coking coal requirement from its captive mines.
In the 2019 financial year, Tata Steel mined 23.3 million tons of iron ore and 6.54 million tons of coal.
The new mining vertical will benefit from this considerable experience and resources, and also make the most of the government moves to open up the mining sector. Recently, the government also indicated that it may allow owners of captive mines to sell resources commercially.
At present, steel companies are not allowed to use captive mines for commercial purpose.
Among the first mines that Tata Steel Mining will target are the ones being auctioned by the Odisha government. The state is set to auction 20 iron ore mines.
Tata Steel Mining has already tasted some success, having won rights to mines two chrome mines in Odisha. The mines will help Tata Steel meet its needs after the lease of its Sukinda mines lapses on March 31, 2020.
Narendran pointed out that the company plans to keep its focus on ferrochrome, which is used to make stainless steel. In another three to four years, added Narendran, the new mines will match Sukinda's capacity.
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