Will explore Australia, New Zealand through Stirling partnership

NMDC Ltd, the largest supplier of iron ore in the country, is said to have entered into an agreement with West Australian mineral resources developer Stirling Resources Ltd to jointly identify and acquire coking coal and iron ore assets in Australia and New Zealand.

The partnership is likely to enable NMDC to use its expertise to tap resources in both the countries. It will also be able to lend its expertise in mineral exploration to the Australian company.

Rana Som, the chairman of NMDC, was unavailable for comment. But corporate and industry sources told DNA Money that NMDC will also have rights for the offtake arrangements for certain projects through this tie-up. Though indications are that this is an agreement, equity participation at a later stage cannot be ruled out, sources hinted.

NMDC, which has expertise in exploration, processing and marketing of minerals in India, had been scouting for investment opportunities in Australia for some time. A joint effort of the two companies could help in evaluating and developing new projects together.

Industry sources said that the Australian mining sector has been going through tough times due to the fall in commodity prices, which has hit the financial viability of projects because of credit squeeze and problems in equity funding. NMDC chairman Rana Som recently went to South Africa to look for opportunities in iron ore mining. Things are yet to work out, as doing business in Africa is not so easy, said a source on the condition of anonymity. NMDC, which has a small office in Tanzania, is keen on gold exploration in this region.

Nandini Goswami/ DNA-Daily News & Analysis Source: 3D Syndication