Ispat SPV in Nigerian iron ore deals

Global Infrastructure Holdings Ltd (GIHL), an overseas special purpose vehicle promoted by Pramod and Vinod Mittal of the Ispat Group, has acquired iron ore mining concessions for two mines in Nigeria.

Sources said, the Nigerian government has awarded long term mining concessions to GIHL for the Nigeria Iron Ore Mining Company's (Niomco) Itakpe and Ajaybanko iron ore mines, which would feed iron ore to Nigeria's largest steel plant, the 2.2 million tonne Ajaokuta Steel Company which is also controlled by GIHL.

The Niomco iron ore mines have an estimated reserve of about 300 million tonne, along with a 2.7 million tonnes beneficiation plant to produce iron concentrates of about 64-68 per cent 'Fe' contents. However, GIHL plans to further develop the mines

According to the contours of the agreement, GIHL will refurbish and operate the mine in the central Nigerian state of Kogi which was built in the 1980s as the primary source of raw materials to the Ajaokuta plant.

The agreement is "to ensure that there is an uninterrupted supply of iron ore to the steel plant", a statement from the Nigerian government said.

Ajaokuta Steel plant produced its first steel in November when its wire rod and light section mills came on stream 25 years after the world's eighth biggest oil exporter started building the plant in 1979.

The plant is producing around 40,000 tonne of wire rods per month, and capacity is expected to be increased in phases to peak in May when the plant is slated to produce at 1.3 million tonnes per annum.