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| NMDC eyes 10 per cent stake in Australian firm |
| BS Reporter / Kolkata Sep 09, 2010, 01:01 IST |
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NMDC, the country’s largest iron ore producer, will initiate talks with Australia’s Riversdale Mining for picking up a minority stake.
“We are looking at a 10 per cent stake,” said Rana Som, chairman and managing director of the state-run miner. He was speaking to reporters on the sidelines of a Confederation of Indian Industry’s seminar on metals and mining.
If NMDC’s stake acquisition materialises, the Indian pie in the Australian company would stand increased.
Now, the company has investors from India (Tata Steel), China (Wuhan Iron and Steel Corporation or Wisco) and Brazil (CSN).
Coal resources identified by Riversdale in Mozambique totals 13 billion tonnes, located on the Benga and Zambeze projects. Riversdale has also thermal and coking coal resources.
In Riversdale Mining, Tata Steel Global Minerals, an indirect subsidiary of Tata Steel, holds 24.21 per cent, while CSN has 16 per cent and Wisco 8 per cent. Tata Steel was, in fact, one of the first investors to be roped in in 2007, CSN came aboard in 2009 and Wisco earlier this year. All three companies were looking to secure raw materials in a volatile market.
“The Wisco investment could become a benchmark, since it happened this year,” industry sources said. Wisco acquired the stake in Riversdale Mining for around $185 million. Riversdale also signed a non-binding memorandum of understanding (MoU) with Wisco for 40 per cent in the Zambeze Coal Project for $800 million. The definitive agreement with Wisco will be concluded in October 2010.
A major player in iron ore with 15 per cent of the country’s production, NMDC is actively pursuing coal assets, coking and non-coking. NMDC is contemplating buying coking coal mines in Russia from Kolmar for around $400 million.
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