RE: interestingInteresting indeed
The below article mentions NML has invited them over...
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NMDC explores multiple growth options
BS Reporter / Kolkata February 08, 2008
Public sector mining major, NMDC, is in the process of charting out mega growth plans, which include forward, backward integration and joint ventures.
Unable to secure fresh mines due to the state governments’ insistence of allotting captive mines to value adders, NMDC has decided to go for backward integration.
Rana Som, chairman and managing director, NMDC said that the public sector would be setting up a global exploration and investigation centre headquartered at Raipur.
“We will get geologists to join us in the exploration and give free service to any state government, which will allow us to do the exploration. The state government may have to give us a prospecting licence (PL) but even if we don’t get a licence we can start on government land,” he said.
Som pointed out that India’s exploration was only four per cent of what Australia was doing, and of that three per cent was in coal, ferrous and non-ferrous accounted for the balance one per cent.
“There is a huge gap between where the Geological Survey of India finishes exploration and a company starts mining - we will bridge the gap,” said Som.
The exploration would not just be restricted to iron ore.
NMDC would expand into diamond and gold as well.
NMDC has eight blocks in Madhya Pradesh and has applied for five blocks in Andhra Pradesh.
Till the end of 2005, NMDC was producing more than 80,000 carats of diamond, but ran into litigation since the mine was inside a sanctuary.
Som said, the company was now awaiting a clearance from the Supreme Court.
In the meanwhile, NMDC had got PLs in Andhra Pradesh and had initiated discussions with some Australian companies for a joint venture.
In gold, NMDC had taken two blocks in Tanzania and given them to an Irish company for prospecting. “The results are good and it will be our gold venture outside India,” he said.
NMDC has also approached the Karnataka government and evinced interest in joining hands for the Hutti Gold Mines Co Ltd, India’s only primary gold producer.
As part of the forward integration programme, NMDC is looking at setting up two pig iron plants of half a million tonne each in Chhattisgarh and Karnataka, close its mines, Bailadila and Donimalai.
The investment would be around Rs 1,200-1,500 crore in each of the plants and the company has entered into an agreement with Rio Tinto for HIsmelt technology for the units.
Also, NMDC, set to takeover Sponge Iron India, has lined up diversification into steelmaking for the unit.
The plants would be commissioned with 30 months from the zero date.
All investments in backward and forward integration would be made from internal accruals. NMDC has cash reserves of around Rs 8,000 crore and would close the financial year with a profit before tax of Rs 3,700 crore on a production of 30 million tonnes. By October 2009, NMDC would add another seven million tonne to its production from the 11B block of Bailadila.
NMDC has also got allocation of Kumaraswamy blocks B and C in Karnataka, which has reserves of around 120 million tonnes.
NMDC has been invited by Canadian publicly traded mining company, New Millennium Capital Corp (NML), to explore the possibility of acquiring the mines.
Currently, New Millennium has appointed merchant bankers to scout for strategic partners to develop the Millennium Iron Ore Range, one of the largest known undeveloped magnetite iron ore deposits in the world.
The Millennium Iron Ore Range comprises the KeMag Iron Ore project in Quebec, 100 per cent owned by NML and the LabMag Iron Ore project, 80 per cent held by the Canadian company.
Rana Som, chairman and managing director, NMDC said, he would visit Canada to initiate discussions.
The range has measured mineral reserves of 3.7 billion tonnes, indicated mineral resources of 2.171 billion tonnes and in addition it includes inferred mineral resources of 2.143 billion tonnes.
Essar Steel is also in the process of readying a bid for the project.