KIOCL Ltd (Kudremukh Iron Ore Corporation Ltd) has terminated the preliminary agreement signed with Curve Capital Ventures Ltd last March, for an undeveloped Mauritanian iron ore asset.
KIOCL CMD Malay Chatterjee confirmed to Business Line that the deal was off. The Bangalore-based Central public sector enterprise formally annulled the agreement with the London-based Curve last month. This came about even when the due diligence exercises — financial, technical and legal — were through and the KIOCL board was about to take a decision based on the consultants’ report.
Non-binding pact
KIOCL had a non-binding agreement with Curve Capital Ventures Ltd for its Akjoujt asset in the Islamic republic of Mauritania, in the West African desert region.
Curve Resources, a wholly-owned subsidiary of Curve Capital, holds the prospecting licence for 938 square km of deposits and has begun exploration activities. The London-based venture capital fund wanted KIOCL, as a strategic partner, to commit financial investment for further exploration and development of the licence area.
Logistics issues
The proposed project needed to procure exploration environmental clearance and preparation of terms of reference for mining in the whole concession area, as also evaluating the logistics of mining and processing the ore (fines) and trading operations. KIOCL, which does not have a mine of its own, has a 100 per cent export-oriented pellet unit in Mangalore.
According to sources, the operation and cost of evacuation of the pellets from the African asset to the consuming markets, including India, would have been large-scale. The cross-border legal issues also proved cumbersome. The Akjoujt asset is about 250 km from the nearest shipping port.
jayanta.mallick@thehindu.co.in