About a fortnight ago, the International Coal Ventures Ltd (ICVL) board approved a binding bid for a deposit having estimated reserves of 220 million tonnes in Queensland, Australia. ICVL is a special purpose vehicle (SPV) of five giant state-owned undertakings: Steel Authority of India, Coal India, NMDC, NTPC and Rashtriya Ispat Nigam.
Since then, there has been some good news. A new government has taken office in Australia, which has said it will review its predecessors controversial proposal for a 40 per cent super-profit tax on mining revenues. The Indian bid had factored this proposal while approving it.
Indian miners, with limited resources in the home country, are breathing easier. It raises the attractiveness of Australia for sure, said Rana Som, chairman and managing director of NMDC, the countrys largest iron ore producer.
NMDC also happens to be part of a consortium that has pitched for a 70 per cent stake in Australian ore producer Atlas Irons Ridley project. The firm, which happens to be the sole Indian bidder in the fray, would have a 15 per cent stake in the project, including sweat equity of five per cent.
The binding bid is yet to be submitted, said Som. With the threat of a super-profit tax diminishing, valuations may have to be revisited. Valuation is only a part, says Som, but adds it would certainly make more assets viable.
India has an estimated 23.59 billion tonnes of iron ore, of which only 6.311 billion tonnes is proven. For coking coal, the country is largely dependent on imports. India has only 4.6 billion tonnes of proven reserves, of inferior quality.
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