GJR to explore mining projects in Indonesia

GJR today announced that it has plans to acquire 50 per cent economic interest in Project Tenement located near the village of Nalo Baru, Sumatra. With an area of 438 hectares, the mine has estimated reserves of 100 million tonnes of high grade iron ore. As part of the agreement, GJR  will invest about $30 million (Rs 120 crore) in mine development.

According to a GJR release, the estimated sale value  of the iron ore deposits in the Indonesian project is $10 billion (Rs 40,000 crore).  The mining work will commence in October this year with an initial production target of 3 million tonnes per annum.

"This joint venture provides good synergies for both groups to tie up for development of the mine. Two special purpose vehicles (SPVs) would be floated to structure the transaction. The first SPV would carry out mine development and the second SPV would carry out marketing activity of the iron ore produced. The GJR Group will deploy its experience and technology to exploit and develop the iron ore mine for captive use as well as for selling of iron ore in the international market," G Janardhan Reddy, chairman and managing director, GJR Group, stated.

"Earthstone's extensive network in the Indonesian and international mining industry will assist in strengthening GJR Group's regional and international presence," said Mahran Nasution, managing director of PT Earthstone Resources.

GJR's Obulapuram Mining Company holds a 134 hectares mineable area and operates a  fully mechanised, open cast iron ore mine. On the other hand, the group's Brahmani Industries Limited is in the process of setting up a 10-tonne per annum integrated steel plant at Jammalamadugu in Kadapa district of Andhra Pradesh.