The National Mineral Development Corporation (NMDC) is in talks with four to five overseas companies for buying fresh assets and due diligence has been initiated for the same.
The acquisition would involve buying coal, iron ore and fertiliser assets in the US, Russia, Australia and Africa, sources told FE.
In the process, the mining major has earmarked a capex of R3,400 crore for FY12 which would include development of its existing mines but exclusive of the acquisition plans. Of this, R2,300 crore has been earmarked for its three million tonne steel plant in Chattisgarh. ?We have not yet set aside any fixed amount for the proposed acquisitions,? sources added.
On the ArcelorMitttal project, sources said the viability is still under discussion between the Indian and Senagalese government though no progress has been made. It may be recalled that NMDC and ArcelorMittal had agreed to invest around $1 billion each towards developing the mines.
But the Senegal government is yet to pay heed since the project required infrastructure for evacuating the iron ore production. That would include a port and a railway track.
Further, the company had recently signed a non-binding memorandum of understanding with Minemakers to develop the Wonarah phosphate deposit in Australia and buy a 50% stake in the project after undertaking a joint feasibility study. The study is expected to take around a year. The proposed Wonarah development will include a mine and downstream processing facilities to produce beneficiated rock phosphate for export, phosphoric acid and finished fertiliser products such as diammonium phosphate and monoammonium phosphate. After the study, both the companies would form a joint venture for the development of the asset and NMDC would have full responsibility to raise finances for the project through debt.
Incidentally, NMDC has also signed an initial pact to buy a 50% stake in Australia?s Legacy Iron Ore as part of its overseas expansion plans to keep buying costs low.