NMDC,Legacy Iron to invest $1.3 bn

Legacy will earn 60% interest by spending minimum of $3.5 mn on developing project to pre-feasibility status.

State-owned NMDC and Australia- based Legacy Iron will jointly invest around $1.3 billion to develop Mt Bevan iron ore project in Western Australia.

NMDC Director (Finance) S Thiagarajan said that the project will be developed on 70:30 debt and equity ratio and the investment will start pumping in once formalities for acquiring 50 per cent stake in Legacy by NMDC are completed. NMDC is buying 50 per cent stake in Legacy Iron Ore for nearly 19 million Australian dollars,which will mark the PSU’s first-ever overseas acquisition.

Mt Bevan is a joint venture between Legacy and Hawthorn Resources. Legacy will earn a 60 per cent interest by spending a minimum of $3.5 million on developing the project to a pre-feasibility status. Mt Bevan is considered to hold excellent potential for the definition of substantial Direct Shipping Ore hematite and magnetite iron resources that are located close to existing road,rail and port facilities,according to Legacy.

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“Mt Bevan may need at least $1.3 billion capex investment. Equity part of NMDC and Legacy will be 30 per cent. As soon we complete the acquisition part we will take that up. As it is they are doing some exploration there. Once we pump in the money,the work will be stepped up,”

Thiagarajan said.

He said there can be some development with regard to Mt Bevan in this fiscal and the state-owned mining company is approaching the Reserve Bank of India for necessary permissions for investment. Replying to another question,Thiagarajan said as of now NMDC has no intention to hike stake in Legacy.

“It is a million-dollar question. It depends on the outcome of the Mt Bevan and how the other people (Legacy) are trying to offload their shares,” he said.

Meanwhile,NMDC is all set to form a joint venture with Jharkhand State Mineral Development Corporation (JSMDC) to develop an iron ore mine in that state. Arun Kumar Shukla,Managing Director JSMDC said both the PSUs are set to form a joint venture company to develop a 115-hectare iron ore mine in West Singhbum district in Jharkhand.

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“The Ministry of Coal last month cleared the hurdles for mine allocation. We are awaiting the state government nod and we expect it any time,” Shukla said.