BHP and RIO not competitive: Australian mining startup
Company as an industry first in local growth market
Almost every day we read of iron ore producers that shut down their businesses because the price of
Iron ore still persists at $ 50 per tonne and not moved away there ...
While most companies go all out, Save money , In order to survive, is
which is listed on the Australian Stock Exchange and on the Frankfurt Stock Exchange company NSL Consolidated
(WKN: A0J353, ASX: NSL) on the verge of benefit from a iron ore market, the practical
acts independently of the global markets. NSL was simply overlooked, and with the other iron ore producers in a pot
cast - just the fact we see an opportunity.
NSL is the only foreign company that his opportunity in the emerging Indian
Iron ore market perceives - a country whose demand for steel is increasing by 7% annually.
While the Chinese economy is going through a transitional phase, India is on a broad scale as
next big international growth story for steel production, and thus also for iron ore.
With his long experience and his good contacts in India NSL is ideally positioned,
to take advantage of this situation.
The industry giants Rio and BHP have taken appropriate conservation measures in order to
To push cash costs for iron ore at $ 34 per ton, and the current price of just under $ 56 for
Ore mineralization with a share of 62% they just create a margin of $ 22 per
Tonne. NSL has cash costs of just $ 23 per tonne - and produces iron ore with a low
Mineralization content.Therefore, the company will receive from Mine $ 43 per ton.
This represents a profit margin of just under $ 20 per ton - about as much as that of the
Industry giants. And moreover for ore with a lower proportion of mineralization.
How in the world did you manage that?
We will illuminate the reasons why this company, which already produces its
Was able to maintain cash costs as low and now in a bright future in a strong
Local market looks.
In addition, it should be mentioned that NSL just a tidy sum of cash for
Expansion has secured. The company wants a higher grade product to similar cash costs
produce, but up to $ 57 per ton to take - and its annual net cash flow
double.
Given this successful development in India NSL plans to acquire further quality
Iron ore projects in the region, which is likely to lead to a rapid increase in production.
Simultaneously NSL is a small business and not without risk - success is no guarantee. However, there is so far no company that for the current market environment of iron ore
an increase in production aims.Yet we see a company that
strikes just this way.
What happens when the Indian iron ore market really attaches to soar?
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May we therefore think again: NSL Consolidated
(WKN: A0J353, ASX: NSL)
NSL Consolidated (WKN: A0J353, ASX: NSL) currently runs through the land, to its shareholders over
to inform the next chapter of its growth story.
The website The Next mining boom has you NSL CONSOLIDATED last year for the first time in
Contribution Tiny Miner's First Sales Days Away: Stockpiles Waiting to be Processed, Delivering Instant
Cash Flowspresented.
Since then it has managed NSL, its treatment plant in Kurnool with 200,000 tonnes
To take annual capacity in operation and to make initial revenues.
Lately the company has also achieved quite a number of ambitious objectives, and
This is an appropriate time to make you fully aware of the imminent for us
Informing expansion plans of this company. NSL has just secured a loan of $ 5 million, which is the
Enables companies to upgrade the existing operation of a plant and a
to take further plant.
Moreover, the company is currently in negotiations to further purchase agreements
for its products, after it recently contracts with major steelmakers JSW
Steel and BMM ISPAT was able to conclude.
If two such large steel producers such as JSW and BMM a contract with NSL to decrease
its products sign, then vouches for the quality of the company.
JSW is the leading private steel producer in India and one of the most prestigious
Steel companies in the world. The $9 billion heavy international Group in India
six offices and is also represented in the USA, South America and Africa.
As the flagship of the $ 11 billion heavy JSW JSW Group, a decades of experience
demonstrate and dynamism with which the company into the leading supplier of special steel in
India could advance.
And now this company buys iron ore from NSL.
The steel production plant of JSW is located in 160 kilometers from
Operating location of NSL in the Karnataka region which is the main steel production belt of India
applies.
In the meantime, BMM can with its current and expanding in the future
Easily handle 100% of the electricity produced from high-grade ore powder NSL steel production.
Before signing the purchase agreement reaffirmed both NSL and BMM that the of
NSL produced iron ore as a raw material for BMM is excellent. Of the
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Steel production plant of BMM is located in approximately 240 km away from the operating site
NSL also in the famous for its steel production Region Karnataka.
After JSW and BSM have been the product of NSL for good, could high
Follow probability further purchase agreements.
NSL has also besides its core product yet another product in store, with it his
Can strengthen the balance - but we'll get to a little later. Economic indicators of the Phase II project
Here are the numbers that we could not believe at first. NSL has to for the Phase II plant
Wet processing of ore following economic indicators presented:
Source: NSL Consolidated Cash cost of $ 22 per tonne?For an iron ore mining operation?In 2015?
Somehow, it has managed to pull a rabbit out of the hat NSL.
How this works, we will explain in a moment, but first a few more details
Management of NSL.
The plan
The attentive reader will have noticed that the ore grades that mentioned in connection with NSL
be, are rather low.
Here the finishing process comes into play, in which the first-mover NSL
Competitive advantage in a fast-growing iron ore market safeguards.
For some reason, the iron ore producers in India have so far rather on higher grade
Iron ore projects focused - a common practice, "to harvest low-hanging fruit" those who
can be reached most easily. Why not?
A high-grade product means that the Erzpreis is higher and the cost of processing
lower ore to steel. A classic win-win situation, right?
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While now the rest of the mining operations in India on the "low-hanging fruit"
focus to NSL quietly a position at geringgradigem ore builds.
In its three projects in India, the company is counting on geringgradiges iron ore, which then
a processing plant is processed into a easy to sell. Refining plants, whether wet or dry processing, are in other countries,
produce or import iron ore - such as Australia, Brazil and China -
frequently encountered.In India they are numerically still barely represented - until now.
Here NSL appears on the scene. With his concept to build a processing plant in which both
the wet and dry processing are used, and where geringgradiges ore
is processed one ore product, which are sold at significantly higher prices than currently
can.
Source: NSL Consolidated
NSL has already built a Phase I facility, which when completed a planned production capacity
is expected to reach approximately 680,000 tons annually. The company wants the plant with ore with a
Feed mineralization content of 20-35%, which in the course of dry processing to 50-55
% ethyl ore to be refined. At the same time, however, is continuously at a further increase
in grade worked.
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The production target of the Phase I facility located on a total of 200,000 tons annually. Priced at $ 43 per ton NSL is expected with its Phase I facility
generate $ 3.2 million annually.
On top of that is already in production and a decrease agreement signed and sealed is.
As already mentioned above, NSL has announced the signing of a sales agreement in July
BMM Ispat for 200,000 tonnes of ore mineralization content of 57% announced.
The attentive reader has of course noticed that by processing ore in Phase I
Investment is expected to only a finishing up to 55%. However, the ore is different to
it goes into the off-take agreement with BMM Ispat, from the other ores ... The ore is already stockpiled and waiting to be processed!
As part of a review of its resources for AP23 in the years 2013 and 2014 has the
Company mined ore for test purposes. During the test phase 200,000 tonnes of ore were
promoted, and this ore was stored easily spot ...
The ore, which a slightly higher mineralization content than the average from the project
mined ore had, was thus at hand, and the Phase I plant was so fed directly
become.
First, technical tests were conducted to ensure that the ore actually the
Requirements of BMM is justice; then the decrease was not agreement on
exclusive basis signed, which means that NSL also with other companies in the
Region can negotiate a possible decrease.
The ore from the stock is currently processed in the Phase I facility and sold to BMM. NSL saves thus the delivery expenses for a full year (but generated already
Cash flow) and has just secured a loan for the extension of the second phase.
Phase II
Last August, was the New York investment company MG Partners II Ltd in NSL
attentivelyand agreed to approve a loan of $ 5 million to the Phase
Bring I plant for production and build a Phase II facility.
In the Phase II plant is a processing plant with wet processing, in which the
Ore to a product with a mineralization content of 58 - 62% is processed. Which
Processing capacity of the plant is 200,000 tons annually. Thanks to the loan financing
could begin with the construction of a prefabricated facility in China who are already in the
next 12 months due to become operational.
The Phase II system is through purchase agreements with JSW Steel and Ispat BMM hedged,
which means that the NSL system only needs to build and then immediately proceeds
can generate.
The technical feasibility is given, the resources are in place and the money is
ready.
One of the main reasons that MG Partners has chosen, in the project to
invest, were the compelling market data of the zukunftsträchigsten player in the world ...
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Why India?
One of the main reasons why we have NSL already longer in sight is that it is the only
Australian company is represented in Indian iron ore market. And this market is likely to in
the coming years more than tripled.
The Indian economy achieved a total GDP of 1.3 trillion $, making it the eighth largest
Economy in the world. On the basis of price parity, in which the low cost base in India
is taken into account, however, results in a GDP of 3.8 trillion $.
From the perspective of price parity, India is thus behind the USA and China - and as we all know, is
China's growth story currently confronted with major challenges.
The consumer market performed very well: each consumer sector in
India is growing. This enables shocks and crises of the world market India
significantly less harm than other emerging markets.
The Steel Ministry of the country announced a few months ago that the
Should be increased steel production capacity by 2025 to 300 million tonnes. This goal
achieve, the country will therefore have a need for additional infrastructure.
All great news for NSL.
In a recent report by Ernst & Young on the steel industry of India has recently
reported that the government has signaled its support. "Government investments in
public infrastructure projects, such as in the transportation network for freight transport and in the
rapidly progressive urbanization, will further promote this growth, "it said.
The majority of the amount of iron ore and steel produced in India is for own use
used as the table below shows.
Source: NSL Consolidated
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This means that the sale of the iron ore produced by NSL in India for a rapid
Urbanization speaks.
In recent years, was able to follow you, what impact the growth in China
has brought up. The greater demand of the emerging middle class for better apartments
led to a construction boom in the urban areas, and increasingly is the possibility
Steel.
In India, there could be a similar development; NSL has here early on a
Secured position and this will continue to use to his advantage. Other hand, a
Business activity in India also associated with a political risk, and must therefore by NSL
are still considered speculative investment.
A look at the figures below give a better insight into the situation. How one
sees India in terms of steel consumption still much room for improvement.
Source: NSL Consolidated
Currently, the per capita consumption of steel 61 kg per person per year amounts, but given the
rapidly progressing urbanization this value could rapidly skyrocket.
NSL is making every effort to meet this demand and the Indian steel industry with local
To supply iron ore. What also speaks as an attractive business location for India, is the
cost environment.
Not only because of lower wages, but also because of easier transport situation
against Australia.
For those who have experienced the confusion in the streets of Delhi and even sing a song about
can, this may sound a bit strange, but compared to Australia, the operation
an iron ore mine in India but much simpler.
In Australia you have to ship the team on a plane in Perth and 1470 km far to
fly to Tom Price.
In India, the team consisting mainly of locals - which is also a
Open small businesses like NSL opportunities in a market which is normally sized
is difficult to overcome.
After NSL thanks to the fixed purchase agreements to finance its core projects
has already secured, it can now also think a grander scale ...
Businesses at a glance
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Basically NSL is an iron mining company that uses a huge market opportunity in India; it
is represented in an area where there are no competitors inexplicably - and
geringgradiges processed ore by a refining process to a higher-quality product.
The company focuses on three major mining concessions in the Indian
Region Andhra Pradesh, which is internationally known for its iron ore deposits.
Source: NSL Consolidated
Let's look at the business premises of NSL little more closely: Deposit AP23
This 73-hectare mining concession in the region Kurnool is only 13 km from the existing
NSL-bearing, 5 km from a main road and 13 km from a railway line.
Any experienced iron ore investors will know that the mineral accounts for only half the battle itself.
The markets and proximity to infrastructure facilities play an important role, whether from a
"Rock Hunter", a commodity hunter, a "Rock Star" is.
NSL has indeed defined no resources in the area of the concession, but already some
technical work carried out and a first exploration target with 38-95 million tons,
an average ore content 20-55% identified. Kuja
For the Kuja project a mining license for the funding of up to 331,000 tons of iron ore was
granted annually.
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While this is only an intended target, but suggests, the potential in this NSL
Project suspects. Why apply for such an extensive delivery when
has no intention also to use it?
The project has access to a well-developed road and rail links and direct
Access to the road leading to the port of Krishnapatnam. This port is the
closest starting point for major exports from the region of Andhra Pradesh, on the
Is there Road 330 km away.
The road is also connected to two train stations for the necessary chargers
Loading of iron ore in wagons equipped. The two railway stations are by road
approximately 18 km or 30 km respectively from the mine site. From the railway station of a
Railway of around 460 km before to the port of Krishnapatnam.
The project is located immediately adjacent to the processing plant where NSL its Phase I production
operates and where processing capacities are expanded.
Here also the Phase II production plant will be built. Mangal
Right next to Kuja is Mangal, for a mining license for the mining of 500,000 tonnes
issued annually over five years. This is also a maximum value, but can be an indicator of
expected to flow rates.
The mine plan was therefore approved with 500,000 tonnes per year and is valid for 5 years.
Again, the necessary infrastructure facilities are available and there have been technical
Work in the area of the orebody performed. 213 samples were ground under a
won your experimental degradation.
The material was mined, crushed and sieved under geological supervision. Of the
average ore grade was 38.3%, with a coefficient of variation between 20% and 60%.
All projects listed above include NSL and are in full operation.
Next phase of growth for NSL
NSL has completed the planning for the first and second phases in Kurnool substantially and
now preparing for the next phase of growth:
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Source: NSL Consolidated
NSL has potential takeover projects in their sights - and this path is not treading you when
you do not have confidence in their own core business.
Here it is also about two important projects for the future ... AP14
In Telangana, the neighboring state of Andhra Pradesh, located NSL has the rights to a
Magnetite project ensured that it has taken over in silence.
As a confirmation of the company's project to a "project of national was
Meaning "declared - which underpins the good relations between NSL and the Government and
a testament to the quality of the project is.
The Indian government has agreed to the project at the difficulties encountered by
Large-scale projects are facing in the country typically, to support - for NSL an absolute plus
and a great recognition.
That
Office
of
Indian
Prime Minister
has
on
Government level
a
"Project Monitoring Group" established that proactively to major new infrastructure projects
care and blocked projects back on track brings, so that they are handled in a timely manner
can.
The PMG is limited in its activities on projects of essential national interest
or projects with total investment of more than 1,000 Indian crore (180 million
Australian dollar). That the NSL project AP14 is elevated to this status, is in the
Realization of the project very useful.
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The target mineralization at AP14 consists of banded magnetite-quartzite, which - the
Surface mapping and close geomagnetic investigations by - more than 50 - 70%
Project area extends. NSL has both physical and geomagnetic measurements carried out and a
Exploration target 134-377 million tonnes of magnetite iron proportions 25-50%
identified.
This exploration target has potential for a high grade core of enriched magnetite ore
in DSO quality (directly transportable ore), of an estimated volume of 5 to 10 million
Tons with an iron content between 55 and 65% houses.
We are here still in the concept phase, but in the course of further project exploration
could open up for NSL still enormous additional potential. And given the looming
Earnings estimates, it is highly likely that the company this project priority
will treat. The mysterious product from NSL ...
Over the past six months, we found that NSL repeatedly over a
Spoke "mysterious product" - and that has made us increasingly curious.
Especially because the company was able to secure for purchase orders and here a
additional source of income is created.
What is this so?
As part of the promotional activities in the project areas NSL noted that ongoing rock material
was funded with a special blend of iron, silica and alumina.
This mixture is used for the performance of the blast furnace and the quality of the final cast iron in the
Under the production deemed essential.
In August NSL received from Srikalahastri Pipes Limited a purchase order for 100 tonnes of this
special mixed material as a test amount of lump ore for use in cast iron pipe systems.
Srikalahastri belongs to Electro Steel Group.
This group represented throughout India focuses exclusively on steel and
Value, and has a plant capacity of over 2.5 million tonnes of hot metal
annually. There are also numerous other value-added enterprises, mainly engaged in steel tubes and
Gussprodukte specialize.
So if the customer is satisfied with the first batch delivered, could be for NSL
may open up another market for a product with which the company is currently
yet generated any revenue ...
We will follow the developments in this area closely.
Final words
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NSL has now financing and purchase agreements in the bag, which for the
Expansion of core business needs. Moreover, the company begins on further
promising projects, such as the marketing of new products and the exploration of
Magnetite, thinking. While you're reading this, NSL already generates revenues from its Phase I
Plant and thus creates a solid basis for further growth.
Under the hood is already talk of takeovers ...
NSL has managed to keep its cash costs at such a low level that there is in the
Can keep pricing compared to industry giants such as Rio and BHP, who with her
Size advantage points. The company makes use of a clever marketing strategy and
secures an early market position immediately adjacent to local operators. Against the backdrop of increasing urbanization one of the largest
Economies in the world, which in to a rapid increase in the demand for steel
Will lead India, NSL is one of the great growth stories of the international
Commodity sector.
The company maintains the best relations with the government and one of its major projects
has been classified as a "project of national importance". If the size and
the dimensions of India's, is the word "significant" might be an understatement ...
After NSL is still in an early development stage, the company is
for the time being continue to be regarded as a speculative investment.
Anyway, we have some exciting months before, where NSL to build its Phase II plant
conclude and thus generate more cash flow than before is ... Do you know the Next Investors VIP Club?
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inform next opportunity offered itself. S3 Consortium Pty Ltd (CAR Nr.433913) is a Vertretungsberechtiger of AG Capital
Markets Pty Ltd.(AFSL No. 292 464).This article is for general
Information.Any recommendations are intended as a general.Your personal goals,
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match before you follow these recommendations.
Note to conflicts of interest
S3 Consortium Pty Ltd maintains or seeks business relations with the company
to which are the subject of his article.Accordingly, investors are on
pointed out that for S3 Consortium a conflict of interest might exist, which the
Impaired Obkjektivität this article.The editors of this article would also like
to point out that they will be in the ownership of shares of the company featured
could.A purchase decision in respect of that share should only be taken
be if the buyer the validity of any information in this article
examined independently.
Disclaimer Note the editor
The information in this article represents the current state at the time of
Publication and are based on publicly available sources, the S3 Consortium Pty Ltd
considered to be reliable.The Consortium provided by S3, published or
Information used is not inside information
NSL Price at posting:
1.2¢ Sentiment: Buy Disclosure: Held
(20min delay)