Monday, February 14, 2005
Ispat company bags mining deals in Nigeria
SURESH NAIR
TIMES NEWS NETWORK
MUMBAI: Global Infrastructure Holding company (GIHL), an overseas special purpose vehicle promoted by Pramod and Vinod Mittal of the Ispat group, has acquired iron ore mining concessions for two mines in Nigeria with estimated reserves of over 300m tonnes.
GIHL is one of the promoters of Ispat Industries India (IIL).
The long-term mining concessions are intended to maintain uninterrupted supply of iron ore to the Ajaokuta steel company, which is also controlled by GIHL.
The two mines - Itakpe and Ajaybanko - are part of the Nigerian Iron Ore Mining Company (Niomco). According to the agreement with the Nigerian government, GIHL will pay a fixed royalty to the government for the ore mined.
Niomco also has a 2.7m-tonne-per-annum beneficiation plant to produce ore with 64-68% iron content.
According to GIHL sources, Itakpe is a developed and producing mine with estimated reserves of over 200m tonnes, and GIHL has plans to further develop both the mines.
Under the agreement, GIHL will refurbish and operate the mine in the central Nigerian state of Kogi, which was built in the 1980s as the primary source of raw materials for the Ajaokuta plant.
The Ajaokuta steel plant will require at least 3m tonnes of ore when working at 100% capacity. The deal with the Nigerian government is of great significance for GIHL as this will make the company's operations in Nigeria fully integrated.
The Ajaokuta steel plant was acquired by the Mittals in mid-August '04. The plant, which was not operational for 25 years, produced its first steel in November when its wire rod mill and light section mills came on stream.
The plant produces 40,000 tonnes of wire rods per month and capacity is expected to be increased in phases to produce 1.3m tonnes by May, '05.
With the Nigerian operations onstream, the Mittals will control over 11m tonnes of steel-making capacities around the world.
GIHL has its operations in Libya, Philippines, Bulgaria and India. GIHL had acquired a 1.4m tonne coke oven plant in Lucavac in Bosnia some time back.
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