NMDC and Rio in talks for 50:50 JV
August 7, 2008
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.