State-owned miner to buy Wonarah reserves of Minemakers for about $15 mn
State-owned NMDC Limited, which acquired Australia-based Legacy Iron Ore in December 2011, is now set to buy Wonarah rock phosphate reserves of Minemakers Limited for about $15 million.
“NMDC will complete the acquisition of the rock phosphate asset in Australia by the end of next month,” in charge chairman and managing director of the country's largest iron ore miner, NK Nanda, told Business Standard.
He said the due diligence process of the asset had been completed and the report would be submitted in a week’s time. NMDC had earlier entered into an agreement with Minemakers to acquire 50 per cent stake in Wonarah deposits, estimated to be 1.26 billion tonnes.
Meanwhile, NMDC has appointed its own executives as chief operating officer and chief financial officer of Legacy, a company focused on iron ore and gold exploration.
“The two executives have been appointed to undertake exploration works on a fast track,” Nanda said, adding they were yet to take charge of their new positions. Prior to this, NMDC had inducted three directors on Legacy’s board.
More From This Section
“As this is the first overseas acquisition of NMDC on its own, the immediate need is to take control of the company and lead the company to a smooth transition of the control and operation,” Nanda emphasised.
Following the acquisition of Legacy, NMDC started expanding its foothold in the international market and is laying its hands on more acquisitions in Brazil, Mozambique and Russia.
Last week, it entered into an agreement for acquisition of 26 per cent stake in a Brazilian iron ore firm, Amplus, which is close to a port with reserves of over 1 billion tonnes.
“We will now undertake exploration works following which we will try to increase our stake in the Brazilian company to 50 per cent,” Nanda said, adding the initial investment in exploration would be less than $30 million
According to Nanda, NMDC will also acquire a coking coal asset in Mozambique in a span of six months. NMDC had finalised a draft agreement with a Mozambique company in this regard.
“Our team of engineers is going to Mozambique for due diligence of the site. We will enter into an agreement with the Mozambique company after the return of our team,” he said.
With regard to the proposed acquisition of coking coal mine in Russia, he said discussions with South Coal, a Russian company, were in advanced stage. He expects to complete this acquisition also in six months.
Besides expanding its operations, NMDC is also planning to acquire a new technology from a German company for mineral beneficiation. This technology is stated to be useful in conversion of low-grade fines into lumps in a cost-effective way.
Nanda said currently NMDC's R&D team was examining the technology. “If it is useful, we will utilise this technology in India, which has lots of fine ore deposits,” he added.