Tata Group-owned Tata Steel is likely to acquire iron ore deposits in Laos. The company has already commenced prospecting some mines in Communist-ruled Laos, media reported.
Sizeable deposits of iron ore are known to exist in Laos, which is bordered by Myanmar and China to the northwest, Vietnam to the east, Cambodia to the South, and Thailand to the west. If the acquisition materializes, then it would be Tata Steel's third overseas iron ore deposit acquisition, the released said.
Last year, Tata Steel entered into a joint venture with Sodemi, a government-owned mineral development company in Africa, to develop Mount Nimba iron ore deposits in Ivory Coast and to meet the requirements of its Corus facilities in the UK and Netherlands.
The move is aimed at stepping up raw materials security owing to soaring prices. The annual iron contract prices in the last twelve months rose 70%, while spot prices increased 117%, the report said.
Presently, Tata Steel meets 22% of its iron ore requirements from its own mines for Indian operations, for the group that includes Corus and other foreign acquisitions. The company has set a target of 40% raw material security over the next three to five years. In order to achieve its, target, Tata Steel has planned two-pronged strategy of participation in the early stage of project.
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