Gas price hike: ONGC, OIL to rake in moolah, GAIL may shrink
RBI puts telecom in infrastructure, makes bank financing easy

Corporate Jun 28, 2013

Jindal Steel may buy Liberia’s largest iron ore mine for $2 bln

New Delhi: Jindal Steel and Power (JSPL) is in talks with Liberia government to acquire the West African country's largest iron ore mine Wologisi in which China has also evinced interest.

According to industry sources, the deal could be as big as $2 billion but it has not been finalised yet and final outcome of talks is expected to take a few months.

They added that some senior functionaries of the Liberian government had met senior officials of the Naveen Jindal-led steelmaker in April here to take forward the deal.

Reuters

Reuters

However, things changed a little after China's ambassador to Liberia, late last month, announced his country's interest in exploiting the Wologisi mine located in Lofa County.

Besides, some lawmakers of Lofa County and a part of local media have also started raising voices against grant of the Wologisi mine to anyone, including JSPL, without ensuring jobs for Liberians as the country's unemployment rate is one of the highest in the world, sources said.

They further said that if the deal goes through, JSPL may also go for setting up a 150 MW or 175 MW coal-based power plant in the West African country.

When asked about company's interests in the Liberian mine, JSPL's Managing Director and CEO Ravi Uppal said that his firm has been negotiating with many African countries for securing iron ore mines but nothing has been finalised yet.

"Nothing, nothing. We keep talking to many people. For iron ore mines, the search is on and we are looking at Africa at the moment but nothing has happened yet," he said.

The Wologisi mine is estimated to hold several billion tonnes of iron ore reserves, though they have not yet been certified.

If the deal goes through, JSPL will be the second Indian firm after Vedanta group's Sesa Goa to invest in Liberia. Sesa Goa, in 2011, had entered Liberia by acquiring 51 per cent stake in Western Cluster iron ore project which consists of three mining concessions, the Bomi, Mano and Bea.

The company has plans to spend over USD 2 billion in first phase to produce 10 million tonnes of iron ore per year. For JSPL it would be the second acquisition in Africa in last one year as it had acquired CIC Energy, which has thermal coal assets in Botswana, in September, 2012.

However, company's plans to acquire iron ore mines in the African continent has not yet succeeded. In February, JSPL had called off its talks to acquire Cameroon-focused iron ore firm Afferro Mining Inc due to low grade magnetite reserves of the African company and high costs involved in beneficiation of the ore.

PTI


Related Stories.