Tata Steel plans to ensure that it gets at least 50 per cent of iron ore from captive sources after 2030, when the leases of the company’s existing mines in Jharkhand and Odisha expire, the steel major said.

India’s oldest producer of the alloy, which came into being in 1907 in modern-day Jamshedpur due to the location’s proximity to high-quality minerals such as iron ore and coal, sources its entire requirement (100 per cent) of iron ore from its own mines at present.

Only the public sector Steel Authority of India Ltd (SAIL) enjoys a similar historical advantage among the integrated steel producers in India, lending them significant cost advantages over peers.

As leases of the company’s legacy mines expire, under the amended Mines and Minerals (Development and Regulation) Act, 1957, which requires auction-based allocation, the company is putting in place a strategy to ensure a smooth transition.

“To manage raw material supply risks through a diversified approach, our goal is to source at least 50 per cent of our iron ore from captive mines to ensure stable operations and reduce the impact of possible supply disruptions,” Tata Steel managing director and CEO T. V. Narendran and executive director and chief financial officer Koushik Chatterjee informed shareholders in the latest annual report of the company.

Tata Steel produced 44 million tonnes of iron ore this year, while the company’s captive coal mines met 25 per cent of the requirement in India, with raw coal production at 6 MT in FY26.

The company’s stated position to secure at least 50 per cent iron ore from captive sources from 2030 indicates that Tata Steel is open to the possibility that some of the legacy mines may not be retained.

Industry sources said Tata’s strategy would be shaped by the competitive intensity in the auction process. Strong competition would result in a higher premium to be paid by the top bidder, weakening the cost advantage of having a captive mine.

While mines acquired via auction will ensure supply chain stability, it will be unlikely to have the same cost base as legacy mines because of the premiums to be paid to the exchequer for iron ore.

As a precursor to the 2030 transition, Tata Steel is already taking steps to ensure that its cost base does not go up dramatically post expiry of leases. Additionally, it has bid for and acquired certain iron ore mining leases that are being developed. It plans to look for additional opportunities when new mining leases are auctioned.

Moreover, it also entered into an understanding with Lloyd Metals & Energy Limited to explore strategic collaboration in Gadchiroli, Maharashtra, including iron ore mining, logistics infrastructure such as slurry pipelines, pelletisation, and steelmaking.