NMDC to buy 50% in two iron ore mines in Oz

The country's top iron ore producer NMDC is likely to acquire this month 50% stake in two iron ore mines in Australia, and is hopeful of finalising two more deals by July.

"NMDC is in advanced stage of deals for buying 50% stake each in two Australian iron ore mines -- in Western and Southern part. The deals are likely by May," a source said.

Both the mines together contain an estimated 1,000 million tonnes of iron ore, the source said, adding that the NDMC plans exploration with the partners. However, the names of the companies and the deal size are not known.

Besides these two mines, the state-run company is also eyeing acquisition of two non-iron ore assets by July for which it is looking at assets in Russia, the US, Australia and Africa.

The miner plans to invest up to Rs 2,400 crore (about $500 million) this fiscal to acquire the assets, the company chairman Rana Som had said last month.

"A navratna company can spend one-third of its networth on overseas acquisitions which comes to $1.2 billion (about Rs 5,400 crore) for us. This fiscal our target is to spend up to USD 500 million and we have already shortlisted four assets abroad," Som had said.

The mining giant is eyeing acquisitions to expand its capacity and to ensure raw material security for its upcoming steel mills in Chhattisgarh and Karnataka.

NMDC has already forayed in to steel making and is setting up a 3 million tonnes steel plant in Chhattisgarh. It plans to build the Rs 15,500-crore mill by 2014 for which it requires raw material security.

Besides, it has a joint venture with Russia's Severstal to set up an initial two million tonnes per annum (MTPA) steel plant in Karnataka at a likely investment of Rs 25,000 crore, which can further be expanded to 5 MTPA.

At present, the Navratna firm has annual iron ore production capacity of about 30 MT from 3 fully mechanised mines in Chhattisgarh and Karnataka. It aims to almost double the production to 50 MT by 2015.