ISPAT COMPANY
BAGS MINING DEALS IN NIGERIA
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.
