Joint venture with Anglo-Australian firm to explore iron ore yielded no result
India’s biggest mining company, the National Mineral Development Corporation (NMDC) has snapped its three-year old ties with the British-Australian mining group Rio Tinto. The move has come at a time when the Indian public sector unit is pursuing an aggressive acquisition strategy in Australia.
NMDC and Rio Tinto had signed a memorandum of understanding (MoU) in August, 2008 to jointly explore investment opportunities in India and abroad, primarily for iron ore. The joint venture could not yield any result in the three years since then.
According to sources, NMDC had expected the MoU to help it enter Rio Tinto’s home turf, Australia. “There were a number of proposals under MoU for NMDC in Australia, but none of them could take concrete shape,” says a senior official in NMDC. The MoU had expired last month and talks were going on between officials of both companies to decide its future before NMDC decided to formally end the ties.
Rio Tinto India’s vice-president Nik Senapati says the company still has relations with NMDC and the lapse of MoU does not mean “we will not talk in future”. On the reason of failure of their joint venture with NMDC, he says, “it was commercial matter between two companies and I should not comment on that.”
According to the news reports, NMDC has of late been pursuing an aggressive acquisition strategy in Australia. It is planning to acquire at least 50 per cent stakes in Legacy Iron Ore Company and Steller Resources in Perth for a cash consideration totalling nearly Rs 600 crore. Besides, the navratna company is also likely to sign another MoU with MineMakers, also in Australia, which owns and operates the Wonarah Phosphate mine having 1,258 million tonnes of reserves, according a media report on September 9.
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