July 3, 2013

JSPL to buy Liberian Wologisi Iron Ore Mine


Jindal Steel and Power (JSPL) is in talks with Liberian government to acquire the West African country's largest iron ore mine Wologisi in which China has also shown interest. According to industry sources, the deal could be as big as $2 billion but it has not been finalised yet while a decision is expected by the end of September 2013, reported Bloomberg citing undisclosed sources.

According to the report, 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 
Wologisi iron ore mine 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. 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, it would be the second acquisition for JSPL in Africa in last one year as it had acquired CIC Energy, which has thermal coal assets in Botswana, in September, 2012 and also JSPL (Jindal Steel and Power) will be the second Indian firm after Vedanta group's Sesa Goa to invest in Liberia.

Here it may be recalled that in March this year, JSPL abandoned its plans to acquire iron ore company Afferro Mining citing low grade magnetite deposits and high costs concerned with the beneficiation of the ore. Incidentally, JSPL wrote off more than $90m after shelving an iron ore project in Bolivia in 2012.

In fact, JSPL has been negotiating with many African countries for securing iron ore mines as part of its overseas expansion. In a recent interview JSPL's Managing Director and CEO Ravi Uppal told PTI "This year we have a capital expenditure target of Rs 12,000 crore for both steel and power together. Next year, it will be about Rs 11,000-12,000 crore, so it will be about Rs 24,000 crore investment in 2 years”. the company will be commissioning new steel mills in Odisha's Angul and in Oman and a new power plant of 2,400 MW capacity in Chhattisgarh's Tamnar. Together with completion of current phase of expansion, JSPL (Jindal Steel and Power) is also gearing up for doing preparatory work on its next phase of expansion, Uppal said, adding that his focus is on beginning phase-II of Angul steel plant and a 1,320 MW power plant in Jharkhand's Godda.

At present Jindal Steel and Power Limited (JSPL) is the largest coal-based producer of sponge iron in Asia and the second in the world. After the completion of current phase of expansion, this India based Steel and Power company will have steel production capacity 7.5 million tonnes per annum (MTPA) from existing 3.5 MTPA, while its power generation capacity will increase to 5,000 MW from existing 2,500 MW.


 (Source: The Business Standard)

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