Tisco to invest more in mining
By Our Corporate Bureau | 27 Oct 2001
The taskforce will make recommendations on the quantum of investments required to be made and will provide estimates of the return on investments the company should expect over a period of time from its mining activity. The taskforces report may be ready in two months. Anticipating a favourable response from the taskforce, Tisco has already applied to the government for assigning more mining leases.
Tiscos mining activity is currently restricted to mining of coal, iron ore, flux and manganese, all of which are important inputs for it. While coal is an important source of energy, others are key raw materials for making steel. Tisco already has the technology and know-how to run a mining activity, and the management thinks it can comfortably convert it into an independent profit centre. Tisco is already a big mining-producer of coal, and the government has been mulling over converting coal mining into a private sector activity. Tisco produces around 5 million tonnes of coal. While it consumes roughly 3.50 million tonnes for its captive use, it sells the balance quantity of 1.5 million tonnes to the Steel Authority of India (Sail), which is deficient in this all-important commodity.
In addition to buying from Tisco, Sail also imports coal to meet its captive requirement. Tisco sells coal to Sail at government-determined prices and if the sector is decontrolled, Tisco would stand to benefit immensely in terms of higher prices. Tisco presently mines its coal from out of the collieries located in Jharia in the Dhanbad district of Chattisgarh and in West Bokaro in Bihar. Its collieries located in Jharia are divided into Jamadoba and the Sijua groups. Tisco mines its iron ore requirements from mines located in Chattisgarh, Orissa and Karnataka. It also has a few dolomite mines in Bhutan.