Volume 9 Edition 3 2012 - The ASIA Miner

IndiaCommissioning under way at NSL’s Kurnool plantTHE Kurnool iron ore beneficiation plantbeing built in the southeast of India by Perthdual bulk commodity developer NSL Consolidatedremains on track. Commissioning onindividual equipment components for phaseone dry plant continues, with sales to be generatedby the end of June.As of early Mar ch all main plant items forphase one of the Kurnool operations had beenerected and commissioning on individualequipment components was progressing.The Mangal mine start-up is under way inpreparation to produce the first mainstream oredeliveries for sustained plant feedstock oncecommissioning moves to steady state production.In addition, the pr ocess of transferringMangal stockpiles to the stockyard for use asbeneficiation plant feedstock has started.A trip in March by NSL managing directorCedric Goode to the Chinese factory fabricatingthe phase 2 wet beneficiation plant,confirmed that fabrication is near completion.The plant will be shipped fr om Chinato India upon completion.The company is aiming at a phase one initialsteady annual production rate of 200,000 beneficiatedtonnes and r emains on track forsales revenue from Kurnool by June 30, 2012.Phase one comprises a conventional crushing,screening and dry separation plant. Thephase 2 wet beneficiation plant process, withannual capacity of an additional 200,000 tonnes,will be br ought into operation later in2012 with completion and first sales contributionin the first half of 2013.The Kurnool stockyard is a 4.85 hectareindustrial site within the south-easter n Indianstate of Andhra Pradesh. As well asthe iron source at the nearby Mangal mine,the plant is also adjacent to NSL’s existingKuja iron mine.NSL’s plan for phases 3 and 4 incorporates1.5 million tonnes annual thr oughput by theend of 2014 aided by the acquisition of a thirdproject, Karimnagar, which has an explorationtarget of 62 million to 125 million tonnes ofmagnetite at grades of 20-50% ir on. Thisproject represents a ‘second generation’ forNSL in India with significantly larger potentialthan the Mangal and Kuja mines. The companyis also seeking other iron opportunitiesin India, which boasts a large but fragmentedindustry with many small-scale operations.India has annual ir on ore production ofabout 160 million tonnes, with 80 companiesoperating about 250 mines. India is theworld’s fourth largest steel producer and thirdlargest iron ore exporter.Commissioning of the dry separator at the Kurnooliron ore plant.NSL is the only for eign company to ownand operate iron ore mines in India. This firstmover position was reinforced recently withthe Rio Tinto announcement to invest $2 billioninto India’s significant iron ore industry.Vedanta to boost zinc and aluminium interestsVEDANTA Group is seeking full control of HindustanZinc and Bharat Aluminium and has offered170 billion rupees (US$3.4 billion) to buythe Indian government’s remaining stakes inboth entities. The gover nment is seeking tonarrow its fiscal deficit through measures includingasset sales and capping of expenses.Buying the stakes will give V edanta’sMumbai-based unit Sterlite Industries (India)control over a combined 964,000 tonnes ofannual zinc and lead-pr oducing capacityand full ownership of a 2 million tonne/yearbauxite mine.Vedanta is of fering to buy the gover n-ment’s 29.5% stake in Hindustan Zinc at a10% discount to the 20-day moving average.Sterlite, India’s biggest copper producer,already owns 64.9% of Hindustan Zinc.It bought 51% of Bharat Aluminium, whichowns the bauxite mine, in 2001 and a majoritystake in Hindustan Zinc a year later.Meanwhile, Vedanta is combining two ofthe group’s publicly-traded Indian units into anew company after a US$8.67 billion pur -chase of oil producer Cairn India. Sesa GoaLtd, India’s largest iron-ore exporter, will absorbSterlite in an all-share deal. Vedanta Aluminiumand Madras Aluminium will also bemerged into the new company, Sesa Sterlite.The arrangement will see the transfer of Vedanta’sdirect holding of 38.8% in Cairn Indiato Sesa Goa, together with the associateddebt of $5.9 billion. Post the transfer , SesaSterlite will have a 58.9% shar eholding inCairn India and Vedanta will have reduced itsloans outstanding by 61% to $3.8 billion, thuscutting debt-service costs by $300 million forthe year ending March 31, 2013.Vedanta’s chairman Anil Agarwal says,“Sesa Sterlite will be one of the largest globaldiversified natural r esources majors,supporting the country’s industrial growth.This transaction is a natural evolution, leadingto simplification of the gr oup’s structure.Sesa Sterlite will be the principaloperating company in the group and with itshigh quality assets, gr owth projects andstrong management, it is well placed tocreate value for all shareholders.”Sesa Sterlite is expected to have a worldclass,low cost asset base in close proximityto high growth markets. Increased diversificationis expected to reduce volatility of earningsthrough commodity cycles, loweringthe cost of capital and enhancing value.Sesa Sterlite will have exposur e to zinclead-silver,iron ore, oil & gas, copper, aluminiumand commercial power with assetsin India, Australia, Liberia, South Africa, Namibia,Ireland and Sri Lanka. This assetbase will benefit fr om a large capex pr o-gram that is largely invested, with capacityexpected to double in the next three years.54 | ASIA Miner | May/June 2012