Tata Steel to source at least half its ore from captive mines after leases end 2030: CEO T.V. Narendran

Tata Steel, India's second-largest steelmaker, aims to source half of its iron ore requirements from captive mines after 2030, down from 100% now, as steep premiums in mine auctions make relying only on leased blocks economically unviable—prompting the company to consider open-market purchases and imports to secure ore.“We will certainly look for at least 50% captive so that the operations are stable, but between 50 and 100 will probably depend on the economics,” Tata Steel chief executive officer T.V. Narendran told Mint on the sidelines of a business event on Saturday, 21 February.The shift comes ahead of the expiry of its leases in Jharkhand and Odisha by FY2030 under the amended Mines and Minerals (Development and Regulation) Act, which mandates auctions for allocation of mineral blocks—which will raise raw material costs at India's oldest steelmakers, as also its peers.The steelmaker will look to buy iron ore from the open market post 2030 when its long term leases of captive iron ore mines end.

Narendran’s comments suggest that Tata Steel may either rebid for some of its current mines when leases expire or look at bidding for other mines whose leases end in the coming years.In FY25, Tata Steel met 100% of its 40.5 million tonnes of domestic iron ore requirement through six legacy mines which helped it produce 21.8 million tonnes of steel.However, a higher dependence on market purchases and imports is expected to raise input costs, potentially squeezing margins for the company after 2030. The sourcing strategy by Narendran, who took over in 2013 as the chief executive of Indian operations and later elevated to global CEO in late 2017, aims to counter that.“So, obviously, the cost of ore will go up for us as we buy