nmdc to acquire stakes in 3 mines down under

NMDC to acquire stakes in 3 mines Down Under

Priyadarshi Siddhanta Posted: Tue May 17 2011, 00:55 hrs New Delhi:

National Mineral Development Corporation (NMDC) is all set to acquire stakes in two iron ore mines and a phosphate mine in Australia this week to bolster its resource base. It would sign two MoUs to acquire at least 50 per cent stakes in Legacy Iron Ore and Stellar Resources in Perth for a cash consideration of nearly Rs 600 crore.


A high-level delegation of the steel ministry led by NMDC chairman Rana Som is currently touring the ore mines of these two firms in Perth, which have a total resource base of nearly 1,000 Million Tonnes.


We intend to sign two MoUs with the promoters of Legacy and Stellar Resources by May 20. This acquisitions would be fully funded from our internal accruals. This would considerably bolster our resource base and help us register our presence in Australia,Rana Som told The Indian Express.


Besides, the PSU is also likely to sign another MoU with MineMakers in Australia, which own and operate a phosphate mine. It is the owner of the biggest phosphates reserves in the world. The Wonarah mine has 1,258 MT, while the Namibian Marine Phosphate Project has a resource base of over 1,500 MT.


Though the company would acquire only 50 per cent stakes each in these mines, yet under the agreed terms, it would retain the First Right to Acquisition in case their promoters decide later to offload the entire stake.


We are every clear that we should have the first right to acquire them if their promoters decide to sell them fully,Som said. The CMD said acquiring such a mine would enable the firm to supply the fertiliser ingredient at reasonable prices and provide some respite to the government in containing the rising fertiliser subsidy bill.


NMDC has announced a capital expansion plan of nearly Rs 24,000 crore in the next five years to ramp up its production capacity to about 50 MT per annum. It has a capital base of over Rs 10,000 crore currently.


The navratna company is also in the midst of acquiring a gold mine in Tanzania. It has carried out the geological mapping and magnetic surveys of Bulyang Ome and Siga Hills gold mines for which the company has been granted Retention Licences. The PSU consultants have applied for environmental and other clearances needed for the project, which would require an investment of nearly Rs 75-100 crore over the next two years. Steel ministry sources said, NMDC is also in talks with the owners of Tacoa Minerals, a coal mine in Alabama, USA.