NMDC to buy majority stake in Brazilian company Amplus
The deal involves an investment of $150 mn for development, however, NMDC will initially invest $10-15 mn to acquire 26% holding & buy upto 50% subsequently.
The deal involves an investment of $150 million for development, however, NMDC will initially invest around $10-15 million to acquire 26% holding and buy up to 50% subsequently.
NMDC CMD NK Nanda said the acquisition of Brazilian firm will help the Indian iron ore giant secure large-scale ore reserves to meet its long-term requirements. The Brazilian firm's mine is located around 150 km close to the coast with reserves of over 1.5 billion tonne.
"These reserves are now waiting exploration work. Initially, we want to acquire 26% and later extend our exploration services to the Brazilian company so as to acquire up to 50% stake in it in lieu of our services," Nanda told ET.
The Brazilian acquisition marks the second overseas buy for NMDC, which has last year agreed to acquire 50% stake in the Australian stock exchange-listed, iron ore firm Legacy Iron Ore for around $20 million.
NMDC had earlier planned to acquire a controlling stake in the Brazilian iron ore firm Greystone Mineracao do Brasil belonging to the London-based businessman Pramod Agarwal for $1billion but later dropped the plan.
At present, the state-owned NMDC has a networth of around 14,200 crore that entitles it to spend around 5,700 crore on overseas acquisitions in terms of regulations prescribed for the public sector enterprises. NMDC is now actively looking to acquire three overseas coal mines, one each in Russia, Mozambique and Australia, a rock-phosphate mine in Australia and an iron ore mine in Brazil.
Nanda said NMDC plans to complete the due diligence process for at least two overseas mines - coking coal and rock phosphate mines in Australia during early next quarter - and complete the due diligence exercise for the other three foreign mineral resources by end of first quarter of next fiscal.
Further, Nanda said, NMDC expects to complete the process to acquire majority stake in the Brazilian iron ore firm by mid of next fiscal. The company hopes to sign at least two overseas coking coal acquisitions during next fiscal and may buy three foreign coal mines by March 2013. "In all, along with Minemakers, we plan to buy five foreign mines during 2012-13," he added.
The coal mine in Russia with some 80 million tonne of coking coal reserves is estimated to involve an investment of around $200m including $80m for acquiring majority stake and balance for development.
With some 60 million tonne reserves and around 20,000 tonne coal production now, the Australian coal mine is estimated to involve investment of around $200m for development and $15m for acquisition. The Mozambique coal mine with around 60m tonne reserves may need around $70m towards acquisition.