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.

July 9th (Business Standard) – NMDC Spice International, a proposed 50:50 joint venture between state-owned miner NMDC and Spice Minerals and Metals, a part of the Spice Energy group, is close to acquiring two iron ore deposits in Armenia. The acquisition is likely to entail an investment of $500 million (Rs 2,173 crore).

NMDC Chairman and Managing Director Rana Som said two iron ore deposits had been identified with reserves of 300 million tonnes and 75 million tonnes and the final discussion over the acquisition will be held by the weekend.

Spice Energy officials were travelling and not available for comment. The firm, promoted by a group of individuals, has interests in oil and gas, power and alternative fuels. Sanjay Malhotra, one of the promoters of Spice Energy, has a stake in SpiceJet.

Investments in these mines will be roughly 30 per cent more than in most mines because the quality of ore here requires higher value addition and pelletisation. The investment will be equally shared between NMDC and the Spice group.

Som said the 75-million- tonne deposits, which were privately held, had been fully explored.

“We will make pellets and bring them to India through the Poti port in Georgia on the Black Sea. The project also has rail links,” he added.

Industry sources said the project could bring some respite and improve availability of iron ore in the Indian market.

The project could help bridge an anticipated shortage in the light of India’s target of a steel capacity of 300 million tonnes by 2020, which would require iron ore reserves of approximately 14 billion tonnes over 30 years. India has proven reserves of 6.311 billion tonnes of the total estimated reserves of 23.588 billion tonnes.

NMDC is a major supplier of iron ore to JSW Steel, Essar Steel, Ispat Industries in the private sector and Rashtriya Ispat Nigam (RINL) in the public sector. NMDC produces 30 million tonnes of iron ore from its Bailadila mines in Chhattisgarh and Donimalai in Karnataka.

May 30 (Moneycontrol) – The NMDC limited (NMDC) – a Government of India Enterprise and Spice Minerals & Metals; an initiative of the Spice Energy group have signed a Memorandum of Understanding today at Hyderabad.

 

This MoU is one of the few private partnership entered by the NMDC which chose Spice Minerals & Metals from 35 other reputed national and international companies to create a JV in 50:50 partnership. The JV will be called NMDC Spice International.

 

Mr. Ravi Chilukuri, CEO, Spice Energy  said, “We are extremely happy & honoured to join hands with an enterprise of such high national repute as NMDC. Leveraging from NMDC’s expertise and skills in the minerals and mining sector combined with Spice Energy’s global reach and logistical prowess; we aim to penetrate the international markets and make a mark for us on the global map.”

 

The signing of this MoU also marks the beginning of a long term a strategic partnership for planning, acquisition, development and management of metal & mineral projects outside India, executable through specific Joint Ventures. The first project under consideration is in Armenia where mining assets in Iron Ore are proposed to be developed by both the Companies, working in synergy.

 

This MoU  is in line with  the emerging trend of public-private partnership (PPP), which enjoys support from the Govt of India. This approach is particularly relevant to acquisition and development of new mining concessions overseas, wherein Indian companies are pitted against very established foreign entities.