NMDC may acquire property in Australia

After acquiring Australian firm Legacy Iron Ore last year for Rs 92 crore, NMDC is eyeing to acquire two more properties— Ridley iron ore deposit of Atlas Mining and Wonarah phosphate reserve of Minemakers Ltd— in the island continent. "The due diligence for both the properties are on. It will take about one or two month," a source close to the development said. The Ridley project, 100 per cent owned by Atlas Mining, contains 970 million tonnes of high grade iron ore reserves and can produce 330 million tonnes of ore with 68.3 per cent Fe content for over 30 years.

The other targeted property, Wonarah deposits of Minemakers, is one of the largest under-developed phosphate reserves in Australia, with an estimated resource of 1.26 billion tonnes at 12 per cent phosphate. NMDC had signed a MoU with Minemakers in June, 2011, for acquiring 50 per cent stake in Wonarah phosphate deposits.

The Indian miner will be using Legacy, which was acquired last year, for both the acquisitions, the source said. The Australian subsidiary of NMDC is in advanced discussions for Aus $200 million line of credit to fund the acquisitions and other mine development programmes, the source added.

Besides this, the Indian miner is also looking at acquiring a producing coking coal mine in Russia. The mine is estimated to have 100 million tonnes of reserves, the source added.

“All these negotiations and due diligence processes are on. By March, you will see some of the deals getting matured,” the source said, when asked for a time line.

Last year, it had dropped the proposal of acquiring a coking coal mine of another Russian firm Vincy Coal at the last moment.

To acquire assets abroad, NMDC has earmarked $500 million. A few days back, it secured a gold mine lease in Bulyang¿Ombe and Saga Hills area in Tanzania.

The Tanzanian gold mine is estimated to have gold deposits of four tonnes and NMDC’s planning to start mining within six months at a proposed investment of about USD 50 million (about Rs 250 crore).

In India, state-run NMDC has a total production capacity of 30 million tonnes (MT) from its three mines— two in Karnataka and one in Chhattisgarh.

The company is aiming to close the current fiscal with a growth of 8 per cent in its total iron ore production to 27 MT. Besides this, it has also kept a capex of Rs 4,655 crore for next fiscal to fund its existing and new expansion programmes.