NMDC in talks with Canadian firm for mega-iron ore project

  • 24/03/2008

  • Business Standard

Government-owned NMDC, India's single largest iron ore producer and exporter, is in talks with Canada's New Millennium Capital Corp (NML) for a $3.5 billion (Rs 14,000 crore) project to develop one of the world's largest undeveloped low-grade (magnetite) iron-ore deposits. Confirming this, Rana Som, NMDC chairman and managing director, said a bid would be submitted by mid-April. NMDC is one of several companies competing for the project. The Millennium Iron Ore Range, in which NML holds a majority stake, has over 9 billion tonnes of reserves, more than India's proven reserves of 6 billion tonnes. Apart from developing the deposits, the project includes building a pellet plant and a 700-km slurry pipeline. If the bid is successful, NMDC could partner another company for the project. The company has floated a global tender for a 50:50 joint venture to expand and develop facilities in current or new mineral properties overseas. Som said NMDC has cash reserves of around Rs 7,000 crore. The project could help bridge an anticipated shortage in iron ore in the light of India's target of a steel capacity of 300 million tonnes by 2020, which would require iron ore reserves of approximately 14 billion tonnes over a 30-year period. Moreover, 75 per cent of India's magnetite ore reserves is located in the ecologically sensitive Western Ghat region. Som said though the gestation period for the Canadian project was a five-and-a half to six years, it could help bridge the gap. "Once our reserves are exhausted, the Millennium Iron Ore Range could last another 40 to 50 years,' he said. NMDC produces about 30 million tonnes of iron ore annually from its Bailadila deposit in Chhattisgarh and Donimalai in Karnataka. It supplies to most domestic steel companies that do not have captive mines like Essar Steel and Ispat Industries. The miner also meets the entire requirements of state-owned Vishakhapatnam Steel Plant.