Tatas may dig into African mining space
The Economic Times — October 25, 2007

The Tata group may soon make a foray into the lucrative mining business in South Africa. The group, which has already earmarked an investment of $450 million in sectors such as telecom and ferrochrome in South Africa, may go for a joint venture with an established mining company operating in the country.

Raman Dhawan, MD, Tata Africa Holdings, told ET that the company would not like to restrict itself only to gold or diamond mining. “We would like to engage ourselves in all forms of mining. Like in our other businesses here, we would like to partner with an established company in the mining sector, too,” he confirmed.

The group is currently exploring opportunities to mine chrome, manganese, coal and iron ore in South Africa. In fact, South Africa is the world’s largest producer of platinum group of metals, manganese, chrome, gold and vanadium. It is also one of the world’s top 10 producers of coal, iron ore, aluminium, nickel and uranium. What’s more, 88% of the world’s platinum group metals, 80% of manganese and 40% of gold lie in South Africa.

At present, a few mining companies such as BHP Billiton and Anglo-American virtually control the sector.

Significantly, many mining companies operating in South Africa are looking at the option of making an entry into the Indian market once the government policy on mining becomes clearer. “We have a huge potential in mining sector in our country. South African companies, which have the right technology in mining, have shown interest in tapping the Indian market,” minister of state for industry Ashwani Kumar told ET.

As many as 45 Indian companies, including the Tata group, M&M, ICICI, SBI, Ranbaxy and Satyam, have set up bases in Johannesburg, also known as the “city of gold”, so as to consolidate their business in Africa. Some of them have succeeded in establishing a strong foothold in the country.

Tata Motors, for example, sold 20,000 vehicles, including trucks, buses and cars, in South Africa in FY07 alone. No wonder, it has a market share of more than 20% of the country’s commercial vehicle segment.