Fresh from acquisition of controlling stake in Legacy iron ore in Australia, NMDC Ltd, the country's major miner, is all set to use the huge cash pile of Rs 18,000 crore it is currently sitting on for overseas buys of iron ore and coking coal assets.
“We are closing in on a couple of acquisitions abroad including one of iron ore in Brazil and coal assets in Russia and Mozambique. We are also set to add another Rs 5,000 crore to the reserves. We plan to leverage these reserves for overseas acquisitions, expansion, production units and diversification,” Mr. N.K. Nanda, Chairman-cum-Managing Director In-charge of NMDC, said.
Focus countries
Addressing a press conference, Mr Nanda said “following the first overseas acquisition of Legacy, which needs immediate attention for expansion, we are close to acquisitions in Brazil, which has more than one billion tonnes of iron ore reserves, and for coking coal assets in Russia and Mozambique, with 50 million tonnes and 150 mt respectively. The due diligence process is under way.”
The public sector undertaking has firmed up plans for a capital expenditure of about Rs 30,000 crore during the XI Plan period, which would include developing existing mines, taking up new ones and for establishing steel and other value-added product plants.
PIPELINE
Mr Nanda said that the production of iron ore and later its evacuation has been hampered due to infrastructure constraints. Therefore, NMDC is planning a 10 mtpa pipeline for evacuation of iron ore from Bailadilla to Vizag with a loop line of 2 mtpa capacity at Nagarnar to cater to steel plant. The pipeline would help in increasing production of iron ore and supply to domestic customers including RINL and Essar Steel.
Tata Steel and NMDC expect to finalise plans for the proposed steel plant and mine in Chattisgarh. Its other 2 mtpa steel plant is at advanced stage and contracts worth Rs 7,000 crore have been awarded.
The expansion project is at advanced stage with the overall capacity going up from 32 mtpa to 44 mtpa within three years. Of this, the Bailadilla XI B project with capacity to produce 7 mt would be added by March 2012, he said.