Tata Steel plans coal mine expansion in Australia
The Economic Times — May 8, 2008

Tata Steel has joined hands with Vale, a leading Brazilian mining company, to invest over A$400 million in a large-scale expansion of the Carborough Downs coal mine near Moranbah in Queensland, Australia.

The duo will also be joined by other joint venture partners in the project. Tata Steel owns a 5% stake in the Australian coal mine.

Carborough Downs is an underground mine operated by Carborough Downs Coal Management and owned 80% by Vale. Apart from Tata Steel (5%), some of the leading global steel companies such as Nippon Steel (5%), Posco (5%), JFE Steel (2.5%) and JFE Shoji (2.5%) also own stakes in it.

The total capital investment is estimated to be A$401 million. The commencement of construction is scheduled for this month and the commissioning of the large-scale and new mining equipment (longwall), which will be one of the largest in Australia, is expected by mid-2009.

Carborough Downs coal mine started production in August 2006 as one of the new coking coal projects. Subsequently, based on a study on coal quality and geotechnical condition acquired through exploration and operation, Carborough Downs JV decided to expand its underground production by longwall method. This investment will ensure 4.9 million tonne of annual production of run-of-mines (ROM) to yield 3.7 million tonne of coking coal and PCI coal from the third quarter of 2009.

This development is in step with Tata Steel’s strategy of achieving raw material security for its global steel business. This decision on expansion of production at the Carborough Downs coal mine gives Tata Steel an opportunity to explore larger areas for coal deposits, which will be a potential source to meet part of the company’s raw material requirement and enhance the long-term competitiveness of its global operations.