NSL Consolidated has signed a US$12.2 million joint venture with a prominent Andhra Pradesh-based company in a bid to expand its iron ore operations in the Indian state.
The alliance between NSL’s Indian subsidiary NSL Mining Resources (NSL MRI) and Vijay Group subsidiary Vijay Mining (VMPL) will renew the company’s focus on developing and expanding its existing mining assets while also exploring additional avenues for growth, including new mine acquisitions.
NSL managing director Cedric Goode says the JV will help to strengthen the company’s position within the Indian mining industry. “The signing of this JV with Vijay Group reflects the sector’s recognition of NSL’s success and the calibre of our approvals and project development pathways in India.
“It also acknowledges NSL’s unique position and achievements with substantial growth potential in a commodity and country with its own strong growth fundamentals. The first tranche funds will be immediately utilized in completing the purchase, construction and commissioning of the phase 2 wet beneficiation plant at Kurnool,” he says.
From April to November of 2012 the Indian steel industry achieved the highest global growth rate of 5.36%. The nation’s existing annual domestic production of about 74 million tonnes is expected to grow to 200 million tonnes by 2020.
“In previous calendar years, the Vijay Group’s extensive iron ore and coal mining contracting business has been operating at a 70 million tonne/annum rate. Their existing equipment and operating/management expertise will be integrated into the JV as quickly as possible, which has significant strategic benefit to NSL,” says Cedric Goode.
The Vijay Group has a history of rapid business growth, coupled with local expertise specializing in mining operations and mining equipment related businesses.
NSL and Vijay are forecasting the JV to be operating at an estimated annual rate of 1.5 million tonnes of saleable iron ore within two years, with the potential to increase this target further in the next 4-5 years. Vijay will earn an initial 40% in NSL MRI for its investment and 9% free equity interest if it delivers two identified operating iron mines to the JV.
NSL successfully commissioned its Kurnool iron ore plant in southeast India in July 2012. The phase 2 wet beneficiation plant process is anticipated to be capable of annually producing up to 200,000 tonnes with final grades of up to 62% iron.
Kurnool is on a 12 acre industrial site within Andhra Pradesh. It uses the nearby Mangal mine as an iron source as well as the adjacent existing Kuja iron mine, which is also owned by NSL, which is the only foreign company to own and operate iron ore mines in India.