From: Biniam Haile \(SWE\) (eritrea.lave@comhem.se)
Date: Tue Aug 12 2008 - 18:51:38 EDT
" NMDC has signed a joint venture with UK-based Spice Energy and is
close to clinching a deal for acquiring mines in mineral-rich Eritrea,
Congo and Armenia, where it is investing Rs 2,000 crore for acquiring
iron ore deposits worth 300 million tonne."
NMDC, Rio Tinto in shopping JV
Priyadarshi, The Indian Express
Posted online: Wednesday, August 13, 2008 at 0120 hrs
Digging Deeper PSU minerals giant will buy mines overseas to boost raw
material reserves
New Delhi, August 12: In its quest to become a global mining giant,
state-run behemoth National Mineral Development Corporation (NMDC) will
enter into an alliance with global biggie Rio Tinto next week. The joint
venture will buy mineral properties in India and abroad.
The companies will sign the MoU on August 18. The equity base of the
joint venture will depend on the acquisition of assets, among other
factors.
Rio has been vigorously trying to enter India. The FIPB is understood to
have cleared one of its proposals pertaining to investment in the mining
sector.
"The MoU will open a new gateway in acquisition of new mines and
expansion of mining activities across the world. We will synergise our
efforts in jointly acquiring, exploring and developing mineral
properties both within and outside the country," NMDC chairman and
managing director Rana Som told The Indian Express.
Som's assertions assume importance especially when NMDC is increasingly
looking overseas to consolidate its raw material reserves like its
foreign counterparts BHP Billiton, Rio Tinto and Vale. NMDC has already
joined the International Coal Ventures Limited, the special purpose
vehicle formed by the leading public mineral and metal companies of the
country to ensure raw material security. With no fresh allocation of
iron ore mines in sight, NMDC has signed a joint venture with UK-based
Spice Energy and is close to clinching a deal for acquiring mines in
mineral-rich Eritrea, Congo and Armenia, where it is investing Rs 2,000
crore for acquiring iron ore deposits worth 300 million tonne.
The mineral giant is also in the fray to acquire a mine in resource-rich
Canada, with reserves of 1 billion tonne, at a cost of about Rs 3,000
crore.
NMDC, which accounts for about 15 per cent of iron ore production in
India, is currently operating three mines - two in Chhattisgarh and one
in Karnataka. It plans to set up two units of 0.5 million tonne each in
Chhattisgarh and Karnataka to make pig iron from iron ore slime. It has
applied for eight mining leases in Karnataka and another one in Orissa.
It is also investing Rs 50 crore to buy drilling machines to explore
iron ore reserves in India.
A key reason why NMDC is keen to acquire mines overseas is to multiply
its net sales realisation from overseas, which has not witnessed any
increase in current trade with Japanese Steel Mills and Posco. So NMDC
is now seeking up to 97 per cent increase in iron ore prices from
foreign steel makers, a move that could have similar repercussions on
the domestic market, which may result in higher steel prices.
Rio's reported underlying profit of $7.443 billion in 2007-08, up 1.4
per cent from 2006 on higher production and commodity prices. NMDC
reported a 56.81 per cent increase in net profit for the first quarter
ended June 30, 2008.
. NMDC is keen to buy foreign mines to multiply its net sales
realisation from overseas, which has not witnessed any increase in
current trade with Japanese Steel Mills and Posco
. It is already in a JV with UK-based Spice Energy to buy mines in
Africa
. It is also in the fray to acquire a mine in resource-rich Canada at a
cost of Rs 3,000 crore
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