Russian tycoon offers coal mines to NMDC for $400 mn

Russian tycoon offers coal mines to NMDC for $400 mn

Moscow/New Delhi: India’s largest iron ore miner NMDC has been offered to buy coal mines in Russia’s Siberian region for $400 million by Intergeo, which is owned by tycoon Mikhail Prokhorov, a media report said on Tuesday.

Intergeo, a mining subsidiary of billionaire Mikhail Prokhorov’s Onexim Group private equity fund is in talks with India’s largest iron miner National Mineral Development Corporation (NMDC) to sell the Yakutia-based Kolmar coal company, leading business daily Kommersant reported today.

“NMDC, Asia’s third iron ore producer, is currently conducting due diligence of Kolmar, and will formulate its offer by 1 December," Intergeo CEO Maxim Finsky was quoted as saying by the daily.

The Kolmar will hold IPO to attract investors if NMDC refuses to acquire it, it added.

Intergeo expects to raise the amount of $400 million through Kolmar sale, $100 million more than the company paid for the asset, Kommersant writes.

NMDC had earlier said it was in talks to buy coking coal mines from Kolmar in Russia to feed its proposed steel plants in Chhattisgarh and Karnataka.

However, when contacted, a top NMDC official said, “We have nothing to offer at this moment."

NMDC CMD Rana Som had earlier confirmed that talks are on, but said that Kolmar’s coal mines were one of the many coal assets NMDC is looking at and nothing has yet been finalised.

The PSU has been trying to acquire mining assets overseas for the last few years to secure raw material supplies for its steel making business.

NMDC along with two other companies had submitted a $230-million non-binding bid to buy 70% stake in an Australian mine owned by Perth-based Atlas Iron.

Also, the company is looking for acquiring coal assets through International Coal Ventures Ltd--the consortium of five leading PSUs, including SAIL, NTPC and RINL.

The firm is also looking at developing iron ore mines in Africa in joint venture with world’s largest steel maker ArcelorMittal.

It is also in partnership talks with Japan’s Nippon Steel for a Rs10,000-crore project in Karnataka, and with Kobe Steel for another project in Andhra Pradesh.

The company has proposed to set up a 2-million tonne per annum (mtpa) plant in Karnataka. Besides these JVs, NMDC plans to commission its 3-mtpa integrated steel plant in Chhattisgarh by 2014.

The miner is investing Rs3,400 crore to augment its annual iron ore production to about 41 million tonnes from around 22 million tonnes at present.