NMDC mulls JV with Australian firm

State-owned National Mineral Development Corporation (NMDC), which is planning to invest up to Rs 2,500 crore in a number of exploration and mining projects in the next four years, is considering a joint venture with an Australian company for iron ore mining in that country.

Addressing a press conference to announce the annual results of the corporation yesterday, NMDC chairman and managing director Ramesh Kumar said the investment in Australian JV could be in the range of Rs 500-600 crore under the present norms which permit NMDC to invest only up to 30 percent of its networth.

"But, we will also have to approach some other methods to go beyond the existing cap," he said. He did not divulge the name of the proposed JV partner.

The investment plans also include diversification of operations into newer areas like nickel extraction, synthetic rutile among other things, according to Ramesh Kumar.

Replying to a question, the NMDC chief said the entire investment would be borne through the corporation's internal accruals. The corporation is also going ahead with the proposed divestment of 15 per cent equity as was decided by the Government of India and it is in the process of identifying the lead manager to handle the public issue. Post divestment, the Government of India would still hold 88 per cent of equity in the Navaratna company, he said.

Coming to investment plans, the corporation is preparing for prospecting and exploration of a number of minerals, including beach sand, diamonds, gold in Orissa, Andhra Pradesh and Karnataka. The corporation had also been exploring for gold in Tanzania where it had found good gold reserves, he said. Besides this, the public sector behemoth has also proposed to set up a one-lakh tonne per annum sponge iron plant and 10 mega-watt power plant at Nagarnar.

Ramesh Kumar said the corporation had already effected a provisional 15 percent increase on iron ore export prices and was anticipating the rise in international prices up to 25 per cent over the previous prices.

NMDC has achieved a 58 percent increase in annual turnover to touch Rs 3,533 crore during the year 2005-06 as compared to Rs 2,230 crore. The corporation has posted an impressive Rs 2,523 crore gross profit, a 106.5 percent increase from Rs 1,224 crore in the previous financial year.