Article by Abhishek Law courtesy of The Hindu Business Line.
A pre-feasibility study of gold exploration projects is being carried out by NMDC’s Australian subsidiary State-run PSU miner, NMDC Ltd, is eyeing development and exploration of iron-ore mines in Mt Bevan in Western Australia. Apart from magnetite iron ore, the company is also looking at the possibility of exploration of other critical minerals like copper, lithium, and tungsten.
The project could see an investment of at least $3-4 billion (₹240-300 billion) in a phased manner if found economically viable.
The PSU miner, through its Perth-based subsidiary, Legacy Iron Ore, has entered into a joint venture with a prospecting company, Hancock.
A subsidiary of Gina Rinehart’s Hancock Prospecting will pay an initial Australian $9 million to earn a stake in the “Mt Bevan” iron ore project, owned by Hawthorn Resources and Legacy Minerals.
Initial studies have revealed that Mt. Bevan reportedly hosts 1,170 million tonne magnetite iron ore resources. Magnetite iron ore can be concentrated into a higher-grade product. Premiums for high-grade iron ore are increasing, partly because they generate steel with more efficiency.
“We are right now in the prospecting stages and investments are being made by the new partner, Hancock. We are looking at two to three years to carry out prospecting studies. Development and exploration of these mines can start may be four years from now,” Sumit Deb, Chairman and Managing Director, NMDC, told BusinessLine.
Hancock’s initial investment of Australian $9 million (₹48–50 crore) will see it earn a 30 per cent interest in Mt Bevan, with Aus $ 8 million cash being paid to Legacy and Hawthorn in proportion to their interest in the project, that is, in a 60:40 ratio. Around $1 million will be working capital during the initial study phase, sources aware of the matter said.
Upon completion of the initial investment, Legacy will hold 42 per cent and Hawthorn will hold 28 per cent.
“The demand for premium high-grade iron ore products from magnetite has been growing due to its efficiency for the steel industry,” Deb added.
The possibility of exploration of other minerals such as tungsten and lithium will also be looked into.
Incidentally, NMDC’s subsidiary, Legacy, is also developing an advanced gold exploration project at Mt. Celia, at the South Laverton Project.
An NMDC official said, “The pre-feasibility study is being carried out for the gold exploration project.”
The company, listed on the Australian bourses, reportedly also holds other prospective areas, including the Robertson Range for iron and manganese, Hammersley for iron, and East Kimberley for gold.
NMDC has invested close to Australian $40 million in the subsidiary where it picked up a majority stake in 2012.