Stainless steel maker Varun Industries today said it would build a heavy minerals processing plant in Madagascar at an estimated cost of Rs 300 crore and sell the entire output to a public sector company, under Department of Atomic Energy (DEA).
The company, which recently discovered huge reserves of heavy minerals, including rare earth elements, plans to produce 5,00,000 tonnes of heavy mineral concentrates in Madagascar per year.
"As per the agreement, the PSU under Department of Atomic Energy, will purchase entire mineral concentrate from Varun Mines to ensure suitability of the constituent minerals for its local operations," a company statement said.
A company spokesperson, Rahul Jain, added that the heavy minerals processing plant would be ready in 7-8 months and supplies to the Atomic Energy Department's PSU would begin by March 2012.
He, however, refused to disclose the name of the government company, citing strategic reasons.
Earlier this month, the company had announced discovery of heavy mineral resources, including rare earth, in Anosy region of Madagascar.
Total Heavy Mineral (THM) reserves in these permit areas are estimated at about 266.8 million tonnes and can be extracted for 40 years, Jain further said.
Describing the association with DEA as of strategic significance, Varun Group's Chairman Kiran Mehta said that the association will lead to a long-term sustainable supply of heavy minerals to the country.
"The present business association will be a win-win alliance for both of us and naturally lead to a long-term sustainable supply of these minerals to strengthen National Strategic Mineral Resource base of India," he said.
Varun Group has taken technical support from Indian Rare Earth (IREL) for carrying out the Mineralogical Analysis on bulk composite samples from the permit areas, the statement said.
It added that the deposits are being considered world class since it has low slime content with Total Heavy Mineral (THM) in the range of 20-30%.
Rare Earth Elements are a group of 17 metals and are considered critical in the advancement and development of emerging green technologies and high-tech applications, including electric and hybrid vehicles, LCD screens, MRI, X-ray machines, mobile devices among others.
