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NMDC consortium pitches for $230-mn buyout of Aussie mine

Press Trust Of India  |  New Delhi 

As part of its overseas expansion plans, state-run miner NMDC, along with two other companies, has submitted a $230-million non-binding bid to buy 70 per cent stake in an Australian mine owned by Perth-based Atlas Iron.

“A non-binding bid of $230 million has been given to the Australian firm for acquiring a 70 per cent stake in one of its mines by a consortium comprising NMDC, Saudi Arabia’s ABS Consulting and Australia-based Boulder Steel,” a source said.

According to the indicative bid, state-owned NMDC will take 15 per cent stake in the mine, possibly the Ridley mines at Pardoo, while Boulder Steel will pick up five per cent share holding, whereas ABS Consulting will have 55 per cent equity of the mining project, which has an estimated reserve of about 2 billion tonnes.

“NMDC will buy a 10 per cent stake at $70 million and would get five per cent stake for free for providing its technical expertise,” the source added.

When contacted, NMDC Chairman and MD Rana Som declined to comment on the proposed venture and said, “It has been our firm corporate strategy to acquire properties especially coal, iron ore, rock phosphate, potash and manganese.”

ABS Consulting, Boulder Steel and Atlas Iron Ltd could not be contacted for comments.

Although the company has submitted the indicative bid, the acquisition may not be an easy one, as a Chinese firm is understood to be rivalling its bid.

“Chinese people are also trying very high for it, that is why the NMDC consortium has given a non-binding bid. Going forward, documents would be prepared, before a binding bid is given,” the source said.

The country’s largest iron ore producer is learnt to be eyeing six overseas properties, including UK-based Ferrous Group’s Brazilian mines and the Australian mines.

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First Published: Mon, March 08 2010. 01:15 IST