Next Investors logo grey

NSL bags MOU deal with local government

Published 14-JAN-2016 11:35 A.M.


3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

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.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.