STUNG by a near trebling of the price of coking coal in a year, Indian steel-makers are seeking relief by buying mines in Australia.
Steel groups across the subcontinent are eyeing Australian coalmining operations, and the head of India's biggest steel firm has warned they will be ''very aggressive'' in buying overseas assets.
The Indian government, which sees steel as critical for economic growth, is leading the charge, and is urging private companies to follow.
The state-owned Steel Authority of India is negotiating for mines in Australia and South Africa. It is thought it is looking to spend up to $1.5 billion to acquire stakes in three mines to give it greater control of the price it pays for coking coal.
The Steel Authority's chief executive, C. S. Verma, confirmed that negotiations were occurring.
The talks are believed to be well advanced, and Mr Verma said more Indian companies would become serious bidders for Australian mines.
With domestic demand for steel growing rapidly but with prices for raw materials rising sharply - coking coal has jumped from $US125 a tonne a year ago to nearly $US300 -India's steel-makers are scrambling for reliable and affordable supplies.
''The time has come for a larger interest as we are expanding capacity,'' Mr Verma told Indian media.
''We don't have the luxury any more to choose mines … so opportunities will have to be taken up.''
He told the Herald: ''We are going to be very aggressive in securing assets outside India.''
With Queensland's mining operations still affected by natural disasters, now was a good time to be looking to invest, Mr Verma said.
''We are at the verge of another coking coal crisis because of heavy flooding in Australia. I think it is a good time [to buy].''
Queensland is the world's biggest exporter of coking coal, but in January up to 85 per cent of its mines were inundated and 29 of 57 across the state were forced to declare force majeure, abandoning supply contracts because of the disasters.
India is one of Queensland's largest coal customers, importing more than 20 million tonnes a year.
Indian firms are reportedly also bidding for Hancock Coal's flagship mines, Alpha Coal Project and Kevin's Corner in the Galilee Basin in Queensland. Essar and GVK Power are reported to have submitted bids of nearly $2 billion, but neither has confirmed its interest.
The Indian company Lanco Infratech bought the West Australian operation Griffin Coal Mining for a rumoured $850 million last year, while Adani Enterprises bought a mine from Linc Energy.
with Som Patidar
