NMDC examining proposals to acquire coal mines in South Africa
Four years after entering into an agreement with South Africa's Kopano for scouting mineral assets, state-owned NMDC is now examining two proposals for acquiring coal mines in the African country.
Hyderabad: Four years after entering into an agreement with South Africa's Kopano for scouting mineral assets, state-owned NMDC is now examining two proposals for acquiring coal mines in the African country.
A senior official of the Ministry of Steel said while one proposal is now under due diligence, the coal miner is set to participate in bidding process for the other asset.
"Due diligence is being done for one asset and the JV has already submitted expression of interest and will participate in bidding process for acquisition of another asset. Besides that, some three to four proposals are currently being studied," the official said.
"We have decided not to acquire more than 50 percent in any of the foreign assets," the official added.
In 2009, NMDC entered enter into a joint venture pact Kopano Ke Matla Investment Company to scout for minerals like iron ore and manganese in the African nation.
The JV -- Kopano NMDC Minerals Pty Ltd -- was formed with 50:50 stake.
Kopano Ke Matla Investment Company is the investment arm of South Africa's biggest trade union federation, the Congress of South African Trade Unions, which facilitates foreign investment in African countries.
As per the rules, a foreign firm willing to develop or acquire mineral assets in the country needs to have a tie-up with a local company, which should be given a 26 percent stake in any JV.
"The JV is mostly interested in acquiring coal assets in South Africa, though it is intended to acquire and develop mineral prospects for steel making raw material such as Iron and Manganese Ores," the official said.
The JV is the second official presence in the African country for NMDC. The state-run miner has an office in Tanzania.
It secured a gold mine lease in Bulyang'Ombe and Saga Hills area in Tanzania and the mine is estimated to have gold deposits of four tonnes. NMDC had earlier said it was planning to invest about USD 50 million in the Tanzanian mine.