KOLKATA (miningweekly.com) – India’s government-owned and -operated MMTC Limited is planning to float a fully-fledged trading company in South Africa to leverage the region’s mineral assets and offset falling iron-ore exports at home.

According to a strategic plan drawn up by the country’s largest trading house, the South African base would enable MMTC to expand its footprint across the continent and make up for the trading volumes that India lost in the international iron-ore trade business.

“MMTC already has an office in Johannesburg. We would now implement plans to upgrade that office into a fully fledged wholly owned subsidiary to expand our business in Africa which offers immense potential in mineral trading,” MMTC chairperson Ved Prakash said.

Given the mineral potential of the continent, the new MMTC base would focus on expanding its trading volumes in coal, diamonds, chromium, cobalt, platinum and manganese.

According to Prakash, iron-ore export opportunities from the country had dried up, owing to several restrictions on mining and an adverse tariff regime, and MMTC would need to compensate for the lost turnover of 15-million to 16-million tonnes a year of iron-ore exports.

Coal trading would constitute a significant portfolio of MMTC’s new Johannesburg-headquartered company considering that India’s import dependency on the dry fuel was expected to be on an upward curve despite the government’s efforts to kick-start new projects.

Coal imports would continue to be robust for at least the next three years since companies would take time in start mining at coal blocks awarded to them through the auction route. From a level of about 70-million tonnes a year three years ago, coal imports had spurted to 150-million tonnes a year and production from Coal India Limited (CIL) had remained static, Prakash said.

Under the circumstances, imports to fill the demand-supply gap were imperative and MMTC would continue to fulfil its role as the nominated trading firm for inward shipment of coal and the South African subsidiary would have an important role to play in this merging opportunity, he added.

The company’s trading turnover was estimated at around $10-billion.