Thursday, 20 September 2012

NMDC in talks with 2 firms to buy assets in Mozambique, Russia

19 SEP, 2012, PTI
NEW DELHI: State-owned iron ore miner NMDC is in talks with two coking coal firms, once each from Mozambique and Russia, for acquiring stakes in them.

Of this, Sol Mineracao Mozambique -- the Mozambique firm-- has coking and thermal coal assets, having an exploration target of about 500 million tonnes, in Mutarara district of Tete Province in the African nation, NMDC said in its annual report for 2011-12.

"The exploration activity is complete in the precise area and is due for the grant of mining license," NMDC's acting chairman C S Verma said in company's annual report for 2011-12.

About the Russian firm, he said that it is in Kuzbass basin in Kemerovo region of Russia and has 50 million tonnes of recoverable coking coal reserves, though did not disclosed its name.

"... is presently in discussions for acquisition of strategic stake with a coking coal company located in Kuzbass basin in Kemerovo region, one of the largest coal mining areas in the world," he said.

The Russian firm's reserves have an upside potential of additional 100 million tonnes, he added.

NMDC officials declined to comment on the two potential deals and how much the company plans to acquire in them.

The Hyderabad-based company has also been scouting for coking coal assets in the U.S and rock phosphate projects in Africa as part of its efforts to increase its global footprint and diversify its portfolio from being an iron ore miner to a natural resources giant.

The company, which had a cash reserves of Rs 20,265 crore in the last fiscal, has kept a budget of Rs 1,200 crore for acquiring properties abroad.

In 2011, the Indian iron ore miner had made its first overseas acquisition by acquiring Australia's Legacy Iron Ore.

Besides, it has signed a memorandum of understanding with Brazil's Amplus Mineracao LTDA few months back to invest in the exploration of the Brazilian firm's iron ore mines and providing NMDC's technical expertise.

In return, NMDC will get 26 per cent stake in Amplus and this can also be increased to 50 per cent at a later stage. As per Indian miner's estimates, Amplus has iron ore reserves of about 1 to 1.5 billion tonnes.

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