NMDC to buy four more iron ore assets abroad

State-owned iron ore miner NMDC, which had entered into a deal to acquire 50% stake in Australia's Legacy Iron Ore last month, is likely to decide on acquiring four more properties overseas by the end of this month.

"The company board is likely to meet this week to take a final call [on these properties]," said a source close to the development.

Of these, two properties --an iron ore mine and a phosphate mine -- are in Australia, while the third one is an iron ore deposit in Brazil and the fourth, a coking coal asset of Russia's Vincy Coal, the source said.

"All these are going to be low-cost acquisitions, totalling $500 million. This would include payment of initial development cost incurred by the holding companies," the source said.

Adding that the company board had also met on October 10 to decide on the proposals, the source said that "some unanswered issues" are likely to decided in the forthcoming board meeting.

The iron ore asset in Australia is certified by the Joint Ore Reserves Committee (JORC) code of the country and is "a large asset", the source said, adding that NMDC was looking to acquire "a minimum of 50%" stake in the asset.

Refusing to name the asset, the source said that it is proposed to be acquired through Legacy Iron Ore -- which will be used by NMDC as the launching platform in Australia.

On October 20, NMDC signed a share subscription agreement with Legacy to acquire its 50% shares at a price of AUD 18.89 million (a little over Rs 90 crore), almost a month after it had entered into a deal with the Australian miner for the acquisition.

Besides this, NMDC board would also take a call on buying at least 50% stake in Wonarah phosphate deposits of Australian Securities Exchange-listed firm Minemakers.

The proposal is to form a 50:50 joint venture with Minemakers for the development of Wonarah phosphate deposits, the source said, adding that NMDC was likely to make additional payments to the Australian firm for the initial costs incurred by it.

Besides this, the NMDC board would also decide on buying a coking coal asset of Russia's Vincy Coal and an iron ore deposit of Greystone Mineracao Do Brasil, the source said.

The Russian coking coal mine would provide access to 100 million tonne of coking coal reserves to the Indian firm, the source said, adding that all these assets are of "very good quality".

"After clearance from the board, the company would take next steps like negotiating and forming the acquisition agreements. The aim is enter into a deal for all these properties by December," the source said.