Resource diplomacy

New Delhi : Unarguably, the biggest challenge for a large steel group with ambitious growth plans is to secure uninterrupted raw material supplies, as close to full requirements as possible. This holds true as much for our own Steel Authority of India (SAIL) and Tata Steel, as for the Chinese steelmakers. The more recent behaviour of coking coal prices, particularly in the wake of rains and floods in Australia’s Queensland and, earlier with iron ore, have cemented the resolve of steelmakers across continents to acquire natural resources assets wherever available.

No wonder SAIL chairman C S Verma is keen to lead a consortium of Indian steel and mining groups, drawn from public and private sectors, to bid for a large find of quality iron ore at Hajigak in Bamiyan province of Afghanistan. Geologists, first from Russia and then from the US, have confirmed ore deposits of 1.8 billion tonnes in the region, with iron content of up to 63 per cent in 16 spreads, all amenable to open pit mining. Chances of India finding access to Hajigak deposits look encouraging, for 14 of the 22 companies shortlisted by the Afghan authorities for conferment of mining rights are Indian.