nmdc buys 50% stake in australia phosphate min

NMDC buys 50% stake in Australia phosphate mine
By CR Sukumar Jun 02 2011 , Hyderabad
Tags: News
NMDC has inked its second overseas acquisition deal within a fortnight by agreeing to buy 50 per cent stake in Wonarah rock phosphate mine of Australian mining firm Minemakers for an undisclosed amount.

NMDC on May 24 had agreed to acquire 50 per cent stake in the Australian iron ore firm Legacy Iron Ore, marking its first overseas acquisition and ending its more than three years of overseas search for iron ore, coal and rock phosphate mines.

The latest deal of NMDC to buy significant stake in rock phosphate mine comes as a major relief to the fertiliser companies in India, which import over 5 mt rock phosphate a year, accounting for over 90 per cent of the country?s requirement.

In fact, NMDC was earlier part of a consortium led by Rashtriya Chemicals and Fertilizers, which had pulled out of a bid for rock phosphate mines in Tunisia in September 2009.

NMDC?s director (technical), NK Nanda, told Financial Chronicle that the acquisition of stake in Minemakers? rock phosphate mine will help meet the rock phosphate needs of the Indian fertiliser companies.

Minemakers has signed a non-biding memorandum of understanding with NMDC to ?establish a pathway for the development of the Wonarah Phosphate deposit in Northern Territory?.

In terms of the agreement, NMDC management staff will join the Minemakers team to undertake a joint feasibility study into the agreed aspects of the full development of Wonarah.

A senior NMDC official said one of the top global accounting firms is being hired to conduct the due diligence exercise, which is expected to be completed in the next 90 days or so. ?The valuation of Wonarah mine, the cost of acquisition and the future investments required will be firmed up sometime by around September or October.?

Minemakers? MD, Andrew Drummond, said, ?Wonarah is Australia?s largest known phosphate deposit and a partner of the scale of NMDC brings the financial and marketing capacity to allow the project to be developed to its full potential.?

The proposed Wonarah development will include a mine and downstream processing facilities to produce beneficiated rock phosphate for export, phosphoric acid (an intermediate product) and finished fertiliser products such as DAP (Diammonium Phosphate) and MAP (Monoammonium Phosphate