is the fat lady warming up

From the NMDC website. Looks like the only decision to be made is which process will be chosen. Very interested to see how this pans out.


State-run NMDC aims to close negotiations regarding its 50 per cent stake acquisition in an Australian project for developing phosphate deposits by January 2012, once the company finalises its other $1.3 billion worth iron ore joint venture (JV) this month.

“All our focus is currently on wrapping up the deal with Australian entity Legacy Iron, which is in final stages. Australia’s Foreign Investment Review Board (FIRB) as well as the Legacy shareholders have given their approval to the NMDC-Legacy deal. Some of our officials are still in that country to see it through. Once this is done, we hope to close our deal with Minemakers (for developing its Wonarah phosphate deposits in that country’s Northern Territory) by January 2012,” a senior NMDC official told The Pioneer.

A senior Steel Ministry official told this correspondent that due diligence for Wonarah project would begin soon. NMDC is a Steel Ministry subsidiary.

“Before we move any further on the NMDC-Minemakers JV for Wonarah deposits, due diligence would have to be done. It will happen soon,” the official said.

Both Legacy and Minemakers deals are significant for NMDC, which has ambitious plans of acquiring overseas assets and Australia with its rich mineral deposits of iron ore as well as phosphate, is high on the company’s radar.

In fact for the current fiscal, NMDC has earmarked $500 million for acquiring foreign assets. Australia’s Foreign Investment Review Board (FIRB) has cleared NMDC’s proposal to acquire 50 per cent stake in Legacy Iron Ore. The Indian iron ore producer and exporter had earlier said that it would invest $18.9 million in order to acquire the stake in Legacy, a Perth-based iron ore explorer.

NMDC and Legacy will jointly develop Mt Bevan iron ore project in Western Australia. According to NMDC sources, Mt Bevan is considered to hold excellent potential for iron resources that are located close to existing road, rail and port facilities there.

With its Legacy deal almost through the finishing line, NMDC, which had entered into a non-binding agreement with Australia-based mining major Minemakers earlier this year to develop its Wonarah Phosphate deposits in the Northern Territory of Australia, would form a joint venture (JV) where the Indian entity will take 50 per cent stake and will also be responsible for arranging finances for the project by raising debt.

A delegation of Minemakers officials had met NMDC Chairman Rana Som last month and discussed the details regarding the proposed JV for developing Wonarah deposits. Som himself was in Australia earlier this month to see the Legacy deal through and is said to have met senior officials of Minemakers also.

NMDC sources said that the company is bullish on Australian deposits and therefore is taking steps to wrap up both Legacy as well as Minemakers deals in quick time.

During its meeting with Som last month, Minemakers’ delegation is said to have presented two types of process for Wonarah project- Wet Process Acid process and Improved Hard process.

The estimated capital cost is AUD 2.3 billion for the conventional wet acid process route and A$1.6 billion for the IHP process route, sources said.

NMDC is also said to be keen in acquiring magnetite deposits in Australia.