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Tata Steel in $1bn mine drill
A STAFF REPORTER

GAME PLAN
Calcutta, Dec. 12: Tata Steel will invest $1 to 1.5 billion to develop the Mount Nimba iron ore resource in Ivory Coast.

The mine will be developed over the next three to four years, Tata Steel managing director B. Muthuraman said in the early hours of Wednesday.

The deal was signed with SODEMI, a state-owned mine development company.

Muthuraman said the mine could have deposits of 700 million tonnes to 1 billion tonnes, according to some initial studies done by the local company.

Tata Steel will hold a 75 per cent stake in the joint venture company with SODEMI. This venture will be entrusted with the job of exploring the area and developing the mine.

Mount Nimba, a mountain along the border of Ivory Coast, Liberia and Guinea in West Africa, has been a nature reserve, excluding the Liberia side.

Covering around 180 square kilometres, the Mount Nimba Strict Nature Reserve is classified as a World Heritage Site under Unesco. It includes both rain forest and savannah. The reserve forbids even tourism.

The mountain is rich in iron. There was intensive mining in the Liberian portion of the mountain until reserves were exhausted in 1989.

When asked if this might pose a challenge for Tata Steel, Muthuraman said there were no such issues.

This is clear of all problems. The agreement includes getting permits. And there are no issues with the UN Muthuraman said.

In the last fortnight, Tata Steel sewed two deals in Africa coal in Mozambique and iron ore in Ivory Coast to provide captive raw material sources to its Corus facilities in the UK and the Netherlands.

But both projects will take three to four years to take off.

However, Muthuraman said the Tata Steel Group (Tata Steel and Corus) was well on its way to achieve envisaged raw material security of 60 to 80 per cent.

He did not hazard a guess on how much iron ore Corus plants would get annually from this mine. They require 28-30 million tonnes of iron ore annually.

Muthuraman said the price competitiveness of Corus would improve substantially when the mine started production. He added that synergy benefits between Tata Steel and Corus would exceed the initial estimate of $450 million.