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Kobe Steel mulls tie-up with NMDC for stake buy in Australian ore project

The Hindu Business Line:  July, 2010

Kolkata: Kobe Steel of Japan, which has signed an MoU with NMDC Ltd for setting up an iron nugget plant in Andhra Pradesh, is keen to expand the scope of the relationship with India's largest iron ore producing company, it is learnt.

The Japanese steel major is mulling teaming up with NMDC to acquire majority stake in Atlas Iron's Ridley iron ore project in Australia.

Atlas Iron is planning disinvestment of 70 per cent of its stake in the Ridley project. NMDC has before it a proposal to acquire a stake in it. “The extent of our acquisition will depend on how much the deal is worth”, said NMDC sources.

“If it is around $200 million, perhaps we might consider acquiring 30 per cent stake but if the value becomes much higher, we might have a second thought about it .”

Kobe Steel, it is understood, is keen to acquire about 50 per cent stake, which Saudi Arabia's ABS Consulting had earlier planned to acquire but subsequently backed out. Boulder Steel Ltd of Australia, which had evinced interest in picking up stake in the Ridley project, too is believed to have changed its mind.

Atlas Iron, it is estimated, is having a reserve of two billion tonnes, equivalent to SAIL's Chiria mines in Jharkhand.

NMDC, it is learnt, is mulling a joint venture with ArcelorMittal for developing iron ore mines in Senegal, in Africa. An NMDC team will visit Senegal in August. There is a further proposal to acquire coking coal mines of both soft and hard varieties in Russia, the sources added.