Mumbai: Indian iron ore miner NMDC Ltd said on Monday it had signed a deal with Minemakers Ltd to develop phosphate deposits in Australia and would buy a 50% holding in the project after a joint feasibility study.
The Wonarah deposit is Australia’s largest known undeveloped phosphate rocks and the acquisition will help secure supplies of a critical raw material for the Indian fertilizer industry, NMDC said in a statement to the stock exchange.
India is the world’s biggest importer of rock phosphate and ammonium phosphate fertilizers.
NMDC did not disclose the size of the project but the Australian Financial Review had pegged the Wonarah rock phosphate project at A$1.5 billion in a report this month.
State-run NMDC has been scouting for diversification opportunities to boost growth, including diamond and gold mining, and is building two steel plants in India.
Last month, it struck a deal with Australian miner Legacy Iron Ore to buy a 50% stake.
NMDC, which accounts for about 15% of India’s iron ore production, is building a 3 million tonnes steel plant at Chhattisgarh and is negotiating with Russia’s Severstal for additional coal supplies for the plant.
It plans to spend Rs3,300 crore ($736.1 million) for capacity expansion and the steel project this year, and is counting on its Rs17,200 crore cash hoard to fund acquisitions or investments.
Shares in Minemakers, which fell more than 3% before the announcement, pared losses and were trading down 1.09% at 0424 GMT on the Australian Stock Exchange.
NMDC’s shares rose nearly 1.5% in a subdued Mumbai stock market.