The company has appointed an Indian national who will be working at its new offices in Delhi.

VR Steel MD John van Reenen says this decison was taken in view of the fact that India’s power consumption is set to increase by 60% to 65% in the next six to eight years, “which means that the Asian country will spend a lot of money on mining equipment, particularly drag line buckets and rope shovel buckets”.

India, like China, aims to urbanise its current rural population – at present, only 25% of India’s 1,3-billion people live in urban areas. This will lead to the use of more appliances and pro-ducts, which will grow the country’s coal and steel markets. India currently consumes about 35-million tons of steel a year, a figure which is set to increase to 100-million tons a year in the next eight years.

Duty costs are high in India, therefore, manufacturing within the country is a strong possibility for VR Steel. “We need to look at how we can penetrate the markets, either through our own workshops or through subcontracting manufacturers. On a larger scale, manu- facturing in India is very cost effec- tive,” says Van Reenen.

VR Steel already has a presence in China and, commenting on the company’s decision to expand into the two Asian giants, Van Reenen says, “These are the biggest growth markets in the world.”

The company’s Chinese opera- tion, which was opened earlier this year, is progressing well. Van Reenen reports that, as a result of this operation, it has been able to reduce prices to the Australian market by 15% as a result of the lower shipping and labour costs in China.

“This is really good news for the Australian mining industry and for the com-pany. We are in the process of securing contracts for our dragline buckets and truck bodies for mines in Eastern Australia,” he says.

Meanwhile, concerning the steel industry, Van Reenen comments that he does not expect any volatility in prices, as experienced worldwide earlier this year, more so because iron-ore and coking coal prices have now been fixed until April next year.

The steel prices for next year are hard to determine, says Van Reenen. However, they will probably increase as a result of the ever-rising steel consumption in China, which, in May this year, reached about 44,2-million tons, the highest recorded globally.

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