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NSL bags MOU deal with local government
3 minute read
NSL Consolidated (ASX:NSL) has pulled off a deal with the Andhra Pradesh government which could see the ASX-listed miner produce more than 8 million tonnes of iron ore per year.
The Australian company had been pressing the flesh at an investment summit, where it was able to secure a memorandum of understanding with the state government, overarching to a previous MOU inked with the state’s mining company.
Under the terms of the MOU, the government will help NSL with prompt land acquisition, adequate infrastructure development, and by offering incentives for project development. NSL told investors that the MOU “position NSL to be producing in excess of 8 million tonnes per annum of iron ore”.
The deal could also see NSL construct and operate a centralised pellet plant , while the government has committed to the development of a massive industrial hub just 30km from NSL’s projects in the state.
The 28,000 acre Ovakallu Mega Industrial Hub would include access to water, power, road, and rail.
It is thought the MOU could support the creation of 1800 jobs associated with NSL and an additional 1000 support roles.
At the investment summit, Indian finance minister Sri Arun Jaitley outlined a shift away from cooperative federalism to a competitive federalism where individual states compete for investment dollars.
The MOU from the state is a sign that it is keen to keep NSL’s investment in the state, and that it would be ready to support the company’s activities in the region.
Encouraging states to compete for investment has been one of the key planks of so-called ‘Modi-nomics’ brought about by prime minister Narendra Modi.
NSL managing director Cedric Goode has previously told Finfeed that the new optimism surrounding the prime minister has been filtering down to business in the country.
“It’s providing hope that there’s a way forward for India to accelerate growth, and the normalisation of business practices compared to the western world,” he said.
“Especially with the potential in cutting through some of the lengthy time frames or some of the mulitlayered bureaucracies in place, that sort of thing.
“The language is quite uplifting in terms of what India could achieve and it’s creating that wave of sentiment and trying to pull India along with the potential of what the India could achieve and then the changes happening behind that.”
About NSL Consolidated (ASX:NSL)
NSL Consolidated is set up as a low-cost iron ore miner in the Andhra Pradesh region of India, where it uses a key beneficiation process to bring low-grade iron ore up to snuff to industrial users.
It has a two phase plant strategy in place, taking ore from mining licenses in the region.
A phase one plant is slated to have an ultimate throughout capacity of 680,000 tonnes per year, feeding 20-25% grade ore and putting it through the beneficiation process to convert it to 50-55% grade ore.
Output is slated at about 200,000tpa.
Meanwhile, phase two is being planned as a wet beneficiation plant capable of producing 200,000tpa with a grade of 58-62%. The phase two plant has been underpinned by offtake agreements with JSW Steel and BMM Ispat.