By Peter Murphy ABIDJAN, Dec 11 (Reuters) - India's Tata Steel Ltd will invest $1 billion to $2 billion to develop an iron ore mine in Ivory Coast that could help the company boost its self-sufficiency in raw materials for steel-making. With iron-ore prices expected to rise again for a fifth straight year as China-driven steel demand continues unabated, steel producers are scrambling to secure their own supplies. Tata's Managing Director B. Muthuraman said on Tuesday the company would own a 75 percent stake in the iron ore mine in Nimba Mountain in the west of Ivory Coat. The west African nation's state-owned SODEMI would own the rest. He told reporters via conference call the project was expected to produce 700 million to one billion tons of ore per year. "(Then) we will be well on our way to achieving our target for self-sufficiency," Muthuraman said, adding the company was looking to secure 50 percent to 60 percent of its own iron ore supplies. By comparison, ArcelorMittal , the world's largest steelmaker has a stated objective of 75 percent self-sufficiency. The Tata chief said the Indian company would the money over the next three to four years to develop the Nimba Mountain site. "We want to do everything very fast. We have to do exploration. We have to start planning and we have to start mining," Muthuraman told reporters on the steps of President Laurent Gbagbo's residence, after meeting the Ivorian leader. Muthuraman, who earlier signed a joint venture agreement in the mining and energy ministry, said the first step would be a feasibility study after which a decision would be taken on the required investment. The ore will be used to supply Tata facilities in Britain and the Netherlands, a Tata spokesman said. Muthuraman told Reuters last month the company would seek joint ventures with Australian mining companies because it could no longer supply enough of its own raw materials such as iron ore and coking coal, to meet its steel-making capacity, especially after it bought European steel group Corus for $12.9 billion this year. On Tuesday, he declined to identify where Tata was looking for other joint ventures. Iron ore prices have jumped for five consecutive years and are expected to rise by about another 50 percent this year as mills compete for limited supplies from miners such as Brazil's CVRD , Rio Tinto Ltd/Plc and BHP Billiton Ltd/Plc . BHP has proposed a $140 billion 3-for-1 share purchase of Rio, although Rio has so far rejected the offer. (Additional reporting by Matt Daily and Steve James in New York; writing by Daniel Flynn; Editing by Andre Grenon) (([email protected]; +221 864 5076; Reuters messaging: [email protected], Dakar Newsroom +221 33 864 5076)) Keywords: TATA IVORYCOAST/
Wednesday 12 December 2007 08:07:31 AEST
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