NMDC in talks to acquire majority stake in Brazilian iron ore mining firm
28 Jun 2011
India's state-run miner NMDC Ltd is in talks to acquire a majority stake in iron ore mining firm Greystone Mineracao do Brasil.
Speaking on the sidelines of an event in Delhi, Rana Som, chairman and managing director of India's single largest iron ore producer and exporter told reporters, that the company was currently carrying out due diligence of the iron ore mines, which have reserves of 260 million tonnes with average iron content of 31.8 per cent.
Declining to give further information, Som said, "We have tied-up with a deal of confidentiality Time is not right to talk on the deal.'' When asked if NMDC could be planning to buy a stake in Greystone, "We're a mining company, not investors," Som said.
Though Som did not identify the prospective target, it is widely speculated that NMDC may be looking at Greystone Mineracao do Brasil, for an estimated $1 billion.
Greystone mine, a subsidiary of Jersey-based Zamin Ferrous, which is owned by London-based Pramod Agarwal, an Indian-born metals commodities trader and investor, owns 100 per cent of six exploration licences covering a large, low grade iron ore deposit in southern Bahia state of Brazil.
The area is 70km from the main area of Bamin and within 40km of the new East West railway which directly serve the Bamin project. Greystone had conducted a pre-feasibility study in May 2010.
The Bamin project was previously owned by Zamin Ferrous, which was sold to Kazakhstan-based mining group Eurasian Natural Resources. It was sold in two transactions, with an initial 50-per cent stake being sold in May 2008 for $300 million and the remaining in September 2010 for $720 million. (See: Kazakhstan's ENRC buys iron ore assets in Brazil for $720 million)
