Tata Steel may buy up to 65% in Vietnam co

MUMBAI: Tata Steel will take a 65% stake in its $3.5-billion steel plant venture with Vietnam Steel (VSC). Tata Steel will hold another 30% in the iron ore mines where the project will come up, . For Tata Steel, which signed the agreement with VSC on Tuesday, this is the second foray into Vietnam. Its Singapore subsidiary, NatSteel, recently bought two steel bar rolling plants for $41 million. Tata Steel already makes 120,000 tonnes of steel through its unit in Vietnam.

The deal will give Tata Steel prominence in the country where steel imports have risen by almost 40% this year. The access to iron ore mines is said to be the clinching factor. After its acquisition of Corus, Tata Steel’s raw material security has come down to 17% from 80% and the Indian major has admitted that it is globally scouting for iron ore.

The 4.5MTPA steel plant in Vietnam will need about 6.7MT of iron ore every year. According to industry observers, the Thach Khe mines have reserves of 500MT, far exceeding the plant’s need for 30 years. “Vietnam with a buoyant economy, significant market and raw material is an attractive destination for steel making...The scope and the investment will be estimated after the feasibility studies,” Tata Steel said in a statement.