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 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 person in the know of the development told PTI.
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 reserves of about 2 billion tonnes.
"NMDC will buy 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 easier one as a Chinese firm is understood to be rivaling its bid.
"Chinese people are also trying very high for it, that is why 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 overall learnt to be eyeing six overseas properties, including UK-based Ferrous Group's Brazilian mines and the Australian mines.
"The company has so far received presentations regarding six global mining properties, including the Brazilian mines of Ferrous Resources where it is looking to buy about 50 per cent stake," the source added.
NMDC had recently entered into a non-disclosure agreement with the Ferrous Group for developing its Brazilian mining project, the source said. The group has properties in the US, Canada and Brazil.
NMDC has also entered into a strategic alliance with companies like Tata Steel, ArcelorMittal and Rio Tinto and is working to finalise a mining deal by the end of 2010.
"At least in three properties, NMDC's internal due diligence teams have been on the spot," the source said.
The company produced about 28 MT of iron ore in 2008-09 and has outlined a capital expenditure of Rs 26,000 crore for the next three to four years.