The statement said total capital investment is estimated to be around $379.41 million. The commencement of construction is scheduled for May 2008, and commissioning of the new mining equipment is expected by mid-2009.

Tata's move is in accordance with the company's strategy of progressing toward raw-material security for its global business, the statement said Wednesday.

"The decision on expanding production at the Carborough Down Coal Mine in Australia gives Tata Steel an opportunity to explore larger areas for coal deposits which will be a potential source to meet part of the company's raw material requirement and enhance the long term competitiveness of its global operations,'' Tata Steel said.

Carborough Downs is an underground mine operated by Carborough Downs Coal Management Pty Ltd. Vale and its joint venture partners, including Tata Steel, Nippon Steel Corp. (OTCPK:NISTF), POSCO, JFE Steel and JFE Shoji, own an 80 percent stake in the mine, the statement said.