NMDC Looks To Buy Australian Iron Ore Mine

Indian state-owned miner NMDC said on Sunday that it is in discussion with the Western Australian government to acquire an iron ore mine for the first time outside the country.

The company will be looking for an Australian joint venture partner for the project.

Company Chairman and Managing Director Rana Som met Western Australia's Minister for Regional Development Doug Cunningham in Delhi recently and expressed the company's intention to acquire an iron ore mine.


When contacted, Som said, "Talks are at an initial stage and I have requested the Minister that he has to help us out on various issues, like getting a right partner and so on".

Som said that NMDC would like to have a "hand-holding" partner, be it a public or private player, to invest in Western Australia as its experience comes handy on several matters.

Asked whether NMDC would like to have majority stake in the venture, Som said, "These issues are to be discussed later. So many things are so unknown today!".

"Investment in a greenfield project in western Australia could be around AUD one billion, but it could go up more depending upon the size and the reserves of the mine," a source close to the development said.

In 2007-08, iron ore was the largest export item for Western Australia estimated at AUD 20 billion or 29.1 percent of the total exports. Petroleum accounted for AUD 9.2 billion or 13.3 percent of the total exports for the year.

Total investment in the mining industry during the year was around AUD 17.1 billion, up by 27 percent from 2006-07.

Iron ore and petroleum together accounted for 68 percent of the total value of Western Australia's resources industry in 2007-08 which is pegged at AUD 58.6 billion.

NMDC had sold 26.47 million tonnes of iron ore in 2008-09 as compared to 28.18 million tonnes in the previous fiscal. Total exports was 38.74 lakh tonnes in FY'09, up by 2.54 percent over 2007-08 at 37.78 lakh tonnes.

International Coal Ventures Ltd, a special purpose vehicle in which NMDC is a party along with other leading metal and mining public sector units, is also pursuing acquisition of coal properties in Australia, Mozambique, Canada, Indonesia and the US.

Source: Zee