NMDC to buy five more mines abroad

State-owned NMDC, which had recently struck a deal to acquire 50 per cent in Australia’s Legacy Iron Ore for about Rs 90 crore, is in the process of acquiring five more mines abroad.

Chairman and Managing Director Rana Som told Business Standard the largest iron ore miner in the country would be acquiring a coking coal mine each in the US and Russia, an iron ore mine in Brazil, another iron ore mine and a rock phosphate mine in Australia.

“Due diligence has almost been completed in three of these mines, while that for the balance two will be started shortly,” Som said.

This apart, NMDC had applied for a gold mine lease in Tanzania that has an estimated reserves of six tonnes of pure gold.

The company is also likely to sign an agreement for a strategic stake in a coking coal mine in Mozambique.

Stating NMDC was focused on low-cost acquisitions, Som said overseas foray was expected to cost no more than Rs 1,200 crore.

Talking about Legacy, NMDC’s first-ever foreign acquisition, Som said this would be used as a foothold in Australia not only to develop the mines under Legacy but also for acquiring other mines in the country. “Ultimately, Legacy will be our Australian arm,” he added.

Explaining that NMDC’s aim was to grow both vertically and horizontally, he said the company was setting up steel plants for vertical growth and acquiring mines for horizontal growth.

Dismissing reports that the mines ministry was opposed to NMDC making steel, Som said he was happy that work on three-million-tonne per year steel plant in Chhattisgarh was progressing according to the schedule and the unit would be commissioned by March 2014.

ORE PRICES TO GO UP FROM TOMORROW
Som said the domestic price of iron ore was expected to go up in the coming quarter, starting from Saturday.

“There will be an increase in the pricing, mainly because there is a steep depreciation in the rupee value,” he said, adding there had also been some increase in the global prices of iron ore last quarter.