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.

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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.

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.

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.

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.

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.

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).