Press Trust of India / New Delhi Feb 17, 2010, 16:53 IST
NRI billionaire L N Mittal-led ArcelorMittal and state-owned NMDC are exploring opportunities to join hands for a Rs 10,000-crore mining project in Africa, and may soon look at partnerships in other counties as well.
"NMDC and ArcelorMittal entered into a confidentiality agreement a few months back. To start with they are conducting studies to jointly work on an iron ore project in Senegal, Africa. The partnership could soon expand to other countries as well," an official in the know of the development told PTI.
The companies are undertaking studies for developing the Faleme iron ore mines for which ArcelorMittal had entered into a pact with the Senegalese government in 2007. The mines have estimated reserves of 750 million tonne of iron ore.
"The estimated investment on the integrated iron ore project, including development of a near by port and a railway line, could be Rs 10,000 crore. However, contribution of the companies will depend on their shareholding in the JV, which is still to be finalised," the official added.
With the proposed tie-up, NMDC is looking to expand its global footprint. It has already tied up with giants like Rio Tinto and Tata Steel.
ArcelorMittal too would be keen on forging alliance with India's largest iron ore miner NMDC as it has been reportedly looking for partners to develop the mines, work on which was halted after the global economic meltdown of 2008.
When contacted the spokespersons of both the companies declined to comment.
As per the 2007 agreement between ArcelorMittal and the Senegalese government, the steel giant was expected to start production from the mines in 2011. Now, the company is looking to start production from the reserves only in 2014.
"The project will be developed in phases to achieve an annual production capacity ranging between 15 million tonnes and 25 million tonnes per year at peak operations," the official said.
ArcelorMittal could also consider investments in the downstream steel facilities in future.
The mineral deposits comprising haemetite and magnetite ores are located in four locations in the Faleme region.
The building of a new port near Senegal's capital Dakar and the development of about 750 km of railway link between the mines with the port will be part of the integrated project.
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