India-based miner NMDC is to take a 50% stake in Minemakers` Wonarah phosphate deposit in the Northern Territory in exchange for paying most of the development costs. NMDC to buy 50% stake in Australian phosphate mine Source: www.mineweb.com
India-based miner NMDC is to take a 50% stake in Minemakers` Wonarah phosphate deposit in the Northern Territory in exchange for paying most of the development costs.
MUMBAI -
Indian state-owned mining company, National Minerals Development Corporation (NMDC), has inked an agreement with Minemakers Limited, an Australian-based mining company, to develop the latter`s Wonarah Phosphate deposit in the Northern Territory. The Indian company has agreed to pay most of the development costs.
Wonarah is Australia`s largest known phosphate deposit. The deal with NMDC is set to bring in the required financial and marketing push to allow the project to be developed to its full potential, an official privy to the discussion said.
NMDC is India`s single largest iron ore producer and exporter. This is the Indian company`s second overseas acquisition deal within a fortnight.
Confirming the deal, the official said: ``We have agreed to buy 50% stake in the Wonarah rock phosphate mine of Australian mining firm Minemakers. We are also exploring for rock phosphate, diamonds, copper limestone, tin and tungsten.``
``With this, we can mark our entry into Australia`s largest known undeveloped phosphate deposit and contribute towards securing supplies of this critical raw material for the Indian fertilizer industry,`` the official added.
The terms of the deal were not disclosed but, reports have pegged the Wonarah rock phosphate project at A$1.5 billion.
Both NMDC and Minemakers are to undertake a joint feasibility study into the agreed aspects of the full development of Wonarah, Australia`s largest known, undeveloped, phosphate deposit.
ASX-listed Minemakers has been looking for a partner to develop the estimated 1.2-billion tonnes of resource at Wonarah.
Though both India and China account for around 40% of world fertiliser use, analysts have said that India`s grain yields are half that of the crops grown in the United States. Moreover, with the monsoons having made an appearance in India, the country is witnessing a massive fertiliser shortfall.
On June 6, NMDC informed the Bombay Stock Exchange that it had signed a non-binding memorandum of understanding to establish the roadmap for its participation in the development of the Wonarah phosphate deposit.
The development would include a mine and downstream processing facilities to produce beneficiated rock phosphate for export, phosphoric acid, as well as finished fertiliser products.
Both the firms are to undertake a joint feasibility study into the agreed aspects of the development of the Wonarah deposit. NMDC will then go ahead with the acquisition of 50% equity in the Wonarah project, the official added.
With a turnover of $1.5 billion and a market capitalisation of $21 billion, NMDC is also set to construct its first integrated steel mill in Chhattisgarh by 2014. The firm has inked a pact with Tata Projects and Danieli Corus, Netherland to set up the country`s largest blast furnace for its upcoming steel plant at Chhattisgarh with a capacity of 3 million tonnes of steel per annum. The company recently held discussions with more than 25 interested domestic and international bidders in Hyderabad for the project.
There is an increasing demand for phosphate and potash in India with several farmers keen to increase their crop yields.
India`s food price inflation is currently at a high of 8.55%, which that in neighbouring China has risen to 10.3% over the past year. Analysts have pegged China`s food prices as having risen substantially over the past year, with the average urban Chinese household spending an estimated 38% of its budget on food.
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