Tuesday, January 11, 2011

India’s MMTC sets up in SA

January 10 2011 - By Dineo Matomela
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Indian state-owned company MMTC has established a presence in South Africa, and says it seeks to strengthen South-South ties by “cutting out the middle man” in dealings with local minerals entities.

MMTC, India’s largest trading house, opened shop in Johannesburg on Friday. It seeks to establish joint ventures with local mining operators to meet India’s demand. The company will source minerals especially coal, diamonds and gold, from South African companies.

MMTC was in talks with mineral companies including Impala Platinum, AngloGold Ashanti and Gold Fields, said MMTC marketing director Ved Prakash at a media breakfast on Friday. “We want to import directly from these operations for the benefit of both countries. Right now gold is imported through banks.”

Managing director Hardip Singh Mann elaborated that cutting out the middle man would generally improve both economies. “We will be establishing direct links with South Africa and cutting margins and mediators. We will be able to increase profits for both parties.”

India is one of the fastest-growing economies.

SA Institute of International Affairs research associate Tom Wheeler said he was not surprised India had come to set up business in Africa.

“India is a new economic force in the world and it is expanding its horizon. Market forces are working for that country. Europe has always been here, and currently you always hear about countries like China, South Korea, Russia looking at Africa as the new area for their markets and acquiring mineral resources.”

Indian high commissioner Virendra Gupta said he felt that MMTC should have invested in South Africa five years ago.

He denied that the country was playing catch up with China. “We are not catching up to China, we are doing things at our own pace,” he said.

Mann said South African coal was of high quality. “In India we have coal, however it has high ash content. Our concern is that we need good quality coal to blend with our own.”

Gupta said India would import more coal from South Africa and in turn South Africa would enhance technology at its coal operations.

“In India coal is the major source of power and it is expected that by 2015 the country will require 200 million tons of coal to meet India’s coal requirements. Up to now we have been importing coal mainly from Indonesia.”

Business Report