Tata Steel's Global Quest for Iron Ore as Legacy Mines Approach Expiry
For decades, Tata Steel enjoyed a significant advantage in the steel industry, relying on captive iron ore mines that ensured predictable supply and stable costs. This edge, however, is set to diminish as the company's legacy mining leases begin to expire starting in 2030. To address this challenge, Tata Steel has embarked on a wide-ranging strategy to secure iron ore supplies, spanning from the remote regions of Labrador in Canada to the dense forests of Gadchiroli in Maharashtra.
The End of an Era: Legacy Mines and New Regulations
Tata Steel, Asia's oldest steelmaker, currently meets 100% of its iron ore requirements in India through six legacy mines allocated before the Mines and Minerals (Development and Regulation) Amendment Act of 2015. This legislation mandates that all mines be auctioned rather than nominated by the government, fundamentally altering the landscape for resource acquisition. The loss of these captive mines threatens to erode the company's structural advantage over rivals who depend on costlier auctioned mines or volatile market supplies.
T.V. Narendran, Chief Executive Officer of Tata Steel, emphasized the company's proactive approach, stating, "Maharashtra, Canada, all these are options post-2030." This effort complements the mines Tata Steel has already acquired under India's new auction regime, as the steelmaker braces for a future without its traditional cost buffers.
Domestic Partnerships: Venturing into Conflict-Prone Regions
In a bold move to bolster domestic supplies, Tata Steel has forged strategic partnerships in central India's mineral-rich areas. In December 2025, the company acquired a 50.01% stake in Thriveni Pellets Pvt Ltd. (TPPL), forming a joint venture with Lloyd Metals & Energy Ltd. TPPL owns Brahmani River Pellet Ltd. (BRPL), which operates a 4 million tonnes per annum pellet plant in Jajpur, Odisha, along with a 212-km slurry pipeline. Pellets, essential for steel production, are small, hardened balls made from iron ore.
More significantly, Tata Steel signed a memorandum of understanding with Lloyds Metals & Energy to explore mining opportunities in Maharashtra, particularly in the Gadchiroli region—an area historically affected by Maoist conflicts and largely avoided by businesses. Koushik Chatterjee, Chief Financial Officer of Tata Steel, noted, "We are seeing opportunities as the Maharashtra government looks at the entire Gadchiroli area for development and for mining. We will be keen to participate and understand." The company is also evaluating potential collaborations on steelmaking with Lloyds, highlighting a comprehensive approach to securing raw materials.
Overseas Exploration: Tapping into Canadian Resources
Beyond domestic efforts, Tata Steel has turned to its Canadian subsidiary, Tata Steel Minerals Canada, to diversify its iron ore sources. In January, the company initiated a test shipment of iron ore from Canada for its Indian operations, a strategic move to assess viability beyond 2030. While the shipment is en route, Narendran highlighted that Canadian iron ore, despite higher logistics costs, offers superior quality with iron content above 67% and less than 1% alumina impurity. Low-alumina ore enhances blast furnace productivity, making it a valuable blend with domestic materials.
"So, it's an optionality that we have, which we want to test out well before 2030, so that we can decide on our plans for the Canadian mine depending on its utility for India," Narendran explained. Currently, the Canadian mine, with a capacity of 3 million tonnes per annum expandable to 10 million tonnes, exports ore to Europe and China. For context, Tata Steel mined a record 40.5 million tonnes of iron ore in FY25, supporting 21.8 million tonnes of steel production.
Narendran pointed out the economic rationale for imports, stating, "If everyone is going to bid 100% plus for iron ore mines in India, then the cost of iron ore in India is going to be equivalent to 130-140% of the international market. So, imports become an option."
Challenges in UK Operations and Policy Support
Tata Steel's UK operations continue to face headwinds, with the company missing its guidance to achieve EBITDA breakeven by the end of the fiscal year due to low prices and competition from cheap imports. Despite restructuring efforts, including equipment shutdowns and workforce reductions, hot-rolled coil prices in the UK remain around £500–510 per tonne, approximately £100 below break-even levels.
The company has repeatedly highlighted the lack of adequate safeguard duties or import restrictions in the UK compared to the EU, which allows cheaper imports to suppress prices. While the transition to electric arc furnace-based production is expected to improve costs medium-term, Narendran noted, "UK will not get worse, it will not get much better, maybe slightly better" in the current quarter, emphasizing that break-even is unattainable without government intervention.
Financial Performance and Market Outlook
In the third quarter of FY26, Tata Steel reported a 6% year-on-year increase in consolidated revenue to ₹57,002.40 crore, with a consolidated net profit attributable to owners of ₹2,688.7 crore. Overseas, operations in the Netherlands reported an EBITDA of €55 million, down from €92 million in Q2, while UK losses narrowed to £63 million from £66 million.
The company anticipates sequential improvement in pricing for the March quarter, driven by recovery in Indian and European markets. In India, net realizations are expected to rise by about ₹2,200 per tonne quarter-on-quarter in Q4, reflecting price hikes and improving demand. In Europe, while spot prices have risen, average realizations may dip by €30 per tonne due to product mix shifts, but cost reductions in the Netherlands are projected to offset this impact. In the UK, a meaningful recovery hinges on policy support, as prices have only marginally increased.
As Tata Steel navigates the expiration of its legacy mines, its multifaceted strategy—combining domestic partnerships, international exploration, and operational adjustments—underscores a critical transition in securing raw materials for future growth.
