Guwahati: A pre-feasibility study of gold exploration areas is being conducted by the National Mineral Development Corporation (NMDC)'s Australian affiliate. NMDC Ltd, a state-owned public-sector miner, is interested in developing and exploring iron-ore deposits in Mt Bevan, Western Australia. Aside from magnetite iron ore, the firm is looking into other critical minerals, including copper, lithium, and tungsten.
If the project is deemed to be economically viable, it might result in a phased investment of at least $3-4 billion (240-300 billion).
The PSU miner has formed a partnership with a prospecting firm, Hancock, through its Perth-based subsidiary, Legacy Iron Ore.
Hancock Prospecting, a subsidiary of Gina Rinehart's Hancock Resources, will pay an initial Australian $9 million for an interest in the "Mt Bevan" iron ore project, which is held by Hawthorn Resources and Legacy Minerals.
According to preliminary research, Mt. Bevan has 1,170 million tonnes of magnetite iron ore resources. Magnetite iron ore may be concentrated to produce a higher quality product. Premiums for high-grade iron ore are rising partly because it produces steel more efficiently.
"We are currently in the prospecting stage, and Hancock, our new partner, is making investments." Prospecting investigations will take two to three years to complete. "Development and exploration of these mines might begin in four years," said Sumit Deb, Chairman and Managing Director of NMDC, in a media statement.
Hancock's first investment of Australian $9 million (48-50 crore) will gain it a 30% stake in Mt Bevan, with Legacy and Hawthorn receiving Aus $ 8 million in cash in proportion to their stake in the project, i.e. in a 60:40 split. According to people familiar with the situation, the operating capital will be around $1 million.
Legacy will own 42% of the company when the initial investment is completed, while Hawthorn will own 28%.
"Demand for premium high-grade iron ore products derived from magnetite has increased due to its efficiency in the steel industry," Deb added.
Exploration for additional minerals such as tungsten and lithium will also be considered.
In addition, in the South Laverton Project, NMDC's subsidiary, Legacy, is developing an advanced gold exploration project at Mt. Celia.
"The pre-feasibility study for the gold exploration project is underway," stated an NMDC official.
The business, which is listed on the Australian stock exchanges, apparently owns additional promising locations such as the Robertson Range for iron and manganese, Hammersley for iron, and East Kimberley for gold.
NMDC has invested about $40 million in the company which it holds a controlling share since 2012.
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