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 said the Joint Venture will help to strengthen the company’s position within the Indian mining industry. “The first tranche funds will be immediately utilized in completing the purchase, construction and commissioning of the phase 2 wet beneficiation plant at Kurnool,” Goode said.
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 mt is expected to grow to 200 million mt 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 Joint Venture as quickly as possible, which has significant strategic benefit to NSL,” says Cedric Goode.
NSL and Vijay are forecasting the Joint Venture to be operating at an estimated annual rate of 1.5 million mt of saleable iron ore within two years, with the potential to increase this target further in the next four to five 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 Joint Venture.
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 mt 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.