Global diversified resources company Astra Resources is negotiating the terms of acquiring up to three iron ore mines in India’s Orissa state. A JORC drilling program to confirm reserves at the mines is being completed as a condition of the settlement.
The three sites are part of a cluster of iron ore mines which meet Astra’s strict mining criteria, with high grade (+63%) iron ore resources measured and a total estimated potential reserve of 500 million tonnes.
The cluster of mines have either mining licences in place or will have them in place within 12 months, have previous drilling results or have been mined in the past, are open cut and are close to logistics infrastructure (road and rail) availing supply to local and international markets.
Astra says the largest of these mines (300-400 million tonnes) can be brought into operation within 12 months with the renewal of mining licence and application for an environmental permit.
The company’s chief executive officer Jaydeep Biswas says through these acquisitions, Astra is creating a valuable beachhead in the growing Indian iron ore market. “Due to the abundant mineral resource base and its strategic proximity to major iron ore consumers in the Indian and world markets, Orissa offers an excellent investment opportunity for mining companies and iron and steel manufacturers.”
The investment into the Orissa mines is in line with Astra’s primary strategic focus of servicing the global commodities demand, in particular the expanding resources demands in China and India.
Astra’s managing director Silvana De Cianni says in addition to supplying iron ore locally, the Orissa iron ore mines also provide a strategic opportunity for Astra to vertically integrate its future steel manufacturing operations by securing the supply of raw materials. “Orissa is one of the largest producers and leading exporters of iron ore within India, with the iron ore mined in the province used domestically in Indian steel mills and also exported, mainly to China. Mining costs in India are amongst the lowest in the world.”
Astra’s initial focus will be a domestic sales strategy through the establishment of supply agreements, with the company already in advanced negotiations with Government and major private buyers for initial supply agreements.
According to information available from the Director of Geology and Director of Mines, Orissa has a conservative 5306 million tonnes of iron ore deposits.