NMDC and Rio in talks for 50:50 JV

August 7th (Steel Guru) – Money control.com reported that state owned mining firm NMDC is in talks with Rio Tinto for a 50:50 JV which would bid for global mining assets.

Mr Rana Som CMD of NMDC said that “We are in discussion for a 50:50 joint venture. Rio Tinto was one of the international parties to evince interest in establishing a joint venture when we floated a tender.”

Earlier this year, as many as 35 companies had expressed interest in NMDC’s global tender for floating a joint venture for mining activities. Out of which six were foreign companies.

A Rio Tinto spokesperson said that “Rio Tinto does not comment on market rumor or speculation.”

As per report, the JV besides acquisition of global assets, the partnership could be extended to new assets in the domestic market also. Industry sources said that the partnership could enhance the global mining giant Rio Tinto’s presence in the domestic market significantly.

Like Rio Tinto, NMDC is also involved in the exploration and mining of a wide range of minerals. Also, in the domestic market, NMDC has filed mining applications for iron ore and coal in almost all the mineral rich states. If the discussions with Rio Tinto get through, it would be the domestic miner’s second joint venture company.

Mr Som said that the two joint venture companies would bid for different assets in different countries. NMDC and the Spice Energy group have formed a joint working group, which is conducting due diligence of some assets, including two iron ore deposits in Armenia, which may require an investment of USD 500 million.

Atlas Iron signs JV deals with Fortescue

August 7th (The Sydney Morning Herald) – Atlas Iron Ltd has entered into a joint-venture agreement with Fortescue Metals Group Ltd (FMG) for Atlas’s Abydos project in Western Australia’s Pilbara region.

The joint venture covers a tenement over which Atlas owns the iron ore rights. Atlas also said that it was the first company to seal a port access deal with Fortescue for its new Port Hedland iron ore export terminal. “The primary focus of the joint venture is to define and develop extensions to the FMG Glacial Valley magnetite deposit, (part of the Abydos project)” Atlas said in a statement.

“FMG may earn a 60 per cent joint-venture interest in the iron ore rights by delineating inferred resources of iron ore within the tenement,” Atlas said. It also said FMG may earn a further 15 per cent joint venture interest in the iron ore rights by completing a pre-feasibility study on the mining of iron ore within the tenement.

A further 12.5 per cent joint venture interest may be earned in the iron ore rights by completing a definitive feasibility study on the mining of iron ore within the tenement. Atlas has converted a memorandum of understanding (MOU) into a binding heads of agreement to use Fortescue’s port facilities for the initial period of production from its flagship Pardoo project, about 100km from Port Hedland.

Pardoo commences production in October, with exports to follow in December.

“This is a ground-breaking third-party port access agreement, the first of its kind in Western Australia,” Atlas managing director David Flanagan said. “We now look forward to building on our association with FMG as we commence development of our second iron ore project, 120km south of Port Hedland at Abydos.”

Atlas is expected to negotiate a rail haulage agreement with FMG to transport ore from Abydos to port. It is also likely to use road haulage to get its product from Pardoo to port. Mr Flanagan flew from the Diggers and Dealers Conference in the mining town of Kalgoorlie to Perth to finalise the negotiations. He returned to the popular conference to make a presentation.

He told delegates that Atlas had not yet committed to offtake agreements because it planned to sell about 60 per cent of product on the spot market to capitalise on high prices. “Every other day we receive an offer … with a base case that we would achieve a premium to the benchmark price,” he said.

He said Atlas was spending between $1.2 million and $1.5 million on exploration each week. The only other company that has an MOU with Fortescue is BC Iron Ltd.

Evraz in Australian iron ore pact with China’s MCC

August 1st (Reuters) – Russian steel maker Evraz Group (HK1q.L: Quote, Profile, Research) has joined forces with China Metallurgical Group Corp (MCC) to gain access to Australia’s vast iron ore reserves and supply Chinese steel mills hungry for the key raw material.

Evraz, part-owned by billionaire Roman Abramovich, said on Thursday it would own 75 percent of a joint venture to develop the Cape Lambert Iron Ore project in Western Australia. MCC will own a quarter of the project, which will ship its ore to China.

 

“Given Chinese demand for the raw materials used in steel production is expected to remain very strong, having something in Australia seems like the right move,” said Vladimir Zhukov, senior mining analyst for Lehman Brothers in Moscow.

 

Global prices for iron ore, a crucial ingredient in steel, have quadrupled in the last five years as China — producer of a third of the world’s steel — devours ever more raw materials.

 

Benchmark prices set by leading miners BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) and Rio Tinto (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research) with Chinese buyers rose as much as 96.5 percent this year, the highest jump in a decade.

 

Evraz said in a statement MCC would be entitled to sign an offtake agreement for up to 60 percent of the iron ore produced.

 

Evraz said the Cape Lambert project would be able to produce 15 million tonnes a year of magnetite concentrate. It said the project was in the feasibility stage, but gave no time frame for the start of production or the cost of developing the project.

A potential drawback to the Cape Lambert project is its reliance on magnetite-type ore, which has been largely untested as a reliable source of feed for steelmaking.

 

Traditionally, the Australian iron ore industry has been based on mining higher-grade hematite ores, which currently account for 96 percent of Australia’s total iron ore production.

 

 

 

LONG-TERM INVESTMENT

 

Cape Lambert contains 1.56 billion tonnes of magnetite iron ore resources to internationally recognised Joint Ore Reserves Committee (JORC) standards, Evraz said.

 

“Evraz and MCC’s long-term commitment to the joint development of the project will further unlock the significant value of Western Australia’s mining industry,” Evraz Chairman and Chief Executive Alexander Frolov said through a spokesman.

 

He said the investment represented “an important milestone in the development of magnetite iron ore deposits in Australia”.

 

Cape Lambert Iron Ore Ltd (CFE.AX: Quote, Profile, Research) (CLIO.L: Quote, Profile, Research) this week completed the A$400 million ($378.8 million) sale to MCC of its namesake iron ore deposit, in a region where BHP Billiton and Rio Tinto both have major mining and shipping operations.

 

“Four hundred million dollars is a drop in the ocean for MCC,” said James Wilson, mining analyst for DJ Carmichael & Co in Perth, Australia. “It’s a long-term investment. They have 30 to 50 years of feedstock.”

Cape Lambert paid A$20 million in cash and stock options for the 408 sq km deposit in 2005. Its shareholders approved the sale on Monday following clearance from Australian foreign investment regulators, who have become wary of increased interest by foreign parties in Australia’s resources sector.

 

The Evraz deal is still subject to regulatory approval.

 

Evraz has already agreed to pay $1.5 billion for a controlling stake in another steel group, Delong Holdings (DELO.SI: Quote, Profile, Research), which holds an option to take about 12 percent of Cape Lambert. This had sparked speculation of a pending takeover bid until the sale to MCC was approved.

 

“Evraz already has a foothold in China. There could be synergies with Delong,” Lehman Brothers’ Zhukov said.

 

MCC, which controls assets worth $22 billion worldwide, is also involved in partnerships to develop nickel mines in Australia and Papua New Guinea. In the Pilbara region, it owns 20 percent of the Sino Iron Project near Cape Lambert.

NMDC CMDC JV to speed up work at Bailadila mines

July 29th (Steel Guru) – BL reported that the JV between NMDC and Chhattisgarh Mineral Development Corporation has decided to speed up work on Deposit Number 13 of the Bailadila mines in Chhattisgarh.

According to the report, the deposit has around 300 million tonnes per annum of high grade iron ore and the quantity of minable ore is expected to increase as the exploration starts. Around INR 1,500 crore will be invested in the next three years and the debt equity ratio for the proposed investment will be 2:1.

As per the report the project will have an annual capacity of 10 million tonnes per annum and the production is expected to start within three years.

Innu ink benefits deal on revived iron ore mine

July 28th (AOL News Canada) – Labrador’s Innu Nation has signed an agreement with the company planning to resume mining on long-dormant iron deposits near the Quebec-Labrador boundary.

Labrador Iron Mines plans to extract about three million tonnes each year, as early as 2009, from a site near Schefferville, Que.

The Iron Ore Company of Canada, which operates a large mine in Labrador City, shut down the site in 1982. Soaring steel prices have made the once-abandoned mine viable again.

Labrador Iron Mines reached a deal this spring with Innu in Quebec.

Mark Nui, grand chief of the Innu Nation, would not say what the company’s deal – which involves money, business contracts and jobs – is worth to Labrador’s 2,000 Innu.

Nui noted, though, that the deal is the first time his people will benefit from mining in western Labrador.

“The government has collected revenues out of it through taxes and we haven’t benefited. We’ve had zero,” Nui told CBC News.

“This business of being passive observers to what’s happening on our lands has to stop.”

Nui said the Innu Nation will insist that mining exploration or exploration work will need to come through the Innu Nation.

Labrador Iron Mines registered the project with the Newfoundland and Labrador government in May.

The proposal is now before Environment Minister Charlene Johnson.

NMDC forms mining JV with CMDC

July 5th (The Statement) – State-run National Mineral Development Corporation (NMDC) has formed a joint venture company with Chhattisgarh Mineral Development Corporation (CMDC) to set up a Rs 1,500 crore mining project in the state. The joint venture company, in which NMDC holds 51 per cent and the rest by CMDC, was registered last month, a spokesperson of NMDC said. The official said the two partners would now prepare a road-map for going ahead with the proposed mining project, which would exploit deposit number 13 of the Bailadila mines in Chhattisgarh. The project would have an annual capacity of 10 MT. According to estimates of NMDC, which carried out exploration way back in 1994, the deposit number 13 has an estimated iron ore reserves of about 320 million tons with average ferrous content of 67 per cent.
NMDC had inked a memorandum of understanding with CMDC  in July last year.

NMDC forms new JV with CMDC

June 25th (MyIris) – NMDC has formed a new joint venture (JV) company with Chhattisgarh Mineral Development Corporation (CMDC) for the development of Bailadila Iron Ore, Chhattisgarh. The new JV company has been incorporated as `NMDC-CMDC ` with an initial share ratio percentage of 51:49, under the companies act, 1956.

The company is involved in the exploration of wide range of minerals including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc.

Shares of the company declined Rs 13.4, or 4.2%, to trade at Rs 305.95. The total volume of shares traded was 44,533 at the BSE (1.55 p.m., Wednesday).

Altius and Norvista Sign Labrador Iron Ore Agreement

June 23rd (Fox Business) – Altius (TSX: ALS) announces that it has signed an agreement with Norvista Resources Corporation concerning its Kamistiatusset iron ore project (the “Project”) in western Labrador, Canada. The two companies have agreed to work cooperatively towards creating a new publicly-traded company focused on the western Labrador iron ore mining district.

Altius will direct, operate and solely fund an exploration program for the Project which, if successful, will result in the Project being a qualified property in order to meet listing requirements on a Canadian stock exchange and allow the Company to complete an initial public offering (the “IPO”) of common shares.

Norvista will lead the IPO effort and will be responsible for and solely fund the preparation of all required technical, legal, accounting and other documents. Norvista will also lead management team recruitment initiatives and fund the minimum required working capital as defined by listing requirements.

The agreement will be for a one year term and if successful will result in an IPO within the term. Norvista and Altius will own equal interests in the new company at the time of the IPO and Altius will retain an underlying 3% gross sales royalty with respect to the Project. If an IPO is not completed within the term then the companies will have no obligations to the other and Altius will retain the exploration licences. However, the companies are optimistic on the prospects of success and will undertake their best efforts to complete an IPO. Altius is very pleased to have the opportunity to work with Norvista on this initiative given the successful track record of the principals in numerous mineral ventures.

About Norvista

Norvista Resources Corporation is a private resource company based in Toronto, Canada, with a mandate to develop mineral properties in Canada and major mining regions in the Americas. Through acquisitions, earn-in options and joint ventures, Norvista assists its partners in financing and advancing mineral properties and mine projects to deliver capital appreciation to its shareholders. Norvista was founded by Gerry McCarvill and Doug Bache and the company’s directors include Brian Tobin and Tony Wonnacott.

“Norvista is delighted to work with Altius to develop the Kamistiatusset project located in the heart of Canada’s principal iron ore district”, commented Doug Bache, President & CEO of Norvista. He added, “Altius, a company with significant exploration experience and success in eastern Canada and Norvista, with its record of successful mine financings and development look forward to creating a major iron ore company in western Labrador.”

Kamistiatusset Property

The Kamistiatusset property covers five significant iron ore prospects in the western Labrador iron ore mining district and is near transportation, power and mining infrastructure. An initial suite of drill targets has been selected and a diamond drilling program of up to 5000 metres commenced earlier this month. For additional information regarding the property, please refer to Altius press release dated April 28, 2008 (PR 08-03) at www.altiusminerals.com.

New Iron Ore Properties Acquired

Altius also wholly owns iron ore properties totaling 1200 claims (300 square kilometres) in western Labrador that cover more than 60 documented iron ore prospects, some of which feature high-grade iron ore based on previously reported grab samples (NL Mineral Occurrence Database). These properties will be evaluated during the 2008 field season.

Lawrence Winter, Ph.D., P.Geo., Vice-President of Exploration for Altius, is the qualified person responsible for the technical data presented in this release.

Altius is focused on the generation, acquisition and financing of mineral and energy projects in Newfoundland & Labrador as well as other areas of eastern Canada.

Jinchuan and Fox Resources to sign exploration agreement

June 18th (Steel Guru) – According to Mr Don Harper Managing Director of Fox Resources Company in Australia, the company is expected to sign an agreement with Jinchuan Group in extending to green field exploration.

At present, JNMC has already gained 11% shares of Fox which has a land area of 3,000 square kilometers in Australia that is rich in nickel, copper, iron ore and zinc resources.

Mr Don Harper said that JNMC will decide to add AUD 20 million extra investments on the green field project in the future two weeks. Presently, JNMC has an annual production of 130,000 tonnes of nickel, 200,000 tonnes of copper and 6,000 tonnes of cobalt.

Ferrexpo to start talks on USD 5 billion partnership

June 15th (Steel Guru) – It is reported that Ukrainian iron ore miner Ferrexpo poised to enter the FTSE 100 index will start formal talks with several big mining groups and steelmakers about a USD 5 billion partnership to develop new mines.

Mr Mike Oppenheimer CEO of Ferrexpo said its company aimed to raise its iron pellet production over the next five years, from 9 million tonnes to 35 million tonnes a year. He said that “These plans are well advanced we are at the stage of formal engagement in discussions with interested parties.”

He said that the building of the Yeristovskoye mine would cost about USD 2 billion with the Belanovskoye mine costing USD 2.5 billion to USD 3 billion. He added that “It’s a big resource.”

Mr Oppenheimer said he was aiming to strike a deal with a partner before the end of the year.

Ferrexpo is due to start formal talks this week with companies including Rio Tinto and Anglo American, which are large miners of iron ore, and steelmakers including ArcelorMittal and Voestalpine, which are anxious to secure iron ore supplies at a time of strong demand. Ferrexpo has hired JPMorgan Cazenove to manage the process.

Ferrexpo already has basic designs for the mines and processing plants, but is keen to do a deal with a company that can help with the engineering and management, as well as the financing, of such a big project.

The Switzerland based company controlled by Mr Kostyantin Zhevago, the 33 year old Ukrainian billionaire businessman and politician owns the Poltava iron ore mine in central Ukraine and a plant that turns the ore into concentrated pellets. These pellets are sold to steel companies, especially those operating in central and Eastern Europe such as Voestalpine, ArcelorMittal and US Steel.