KOLKATA (miningweekly.com) - India’s manganese major MOIL, formerly known as Manganese Ore India Limited, has started preliminary talks on acquiring an equity stake in manganese reserves in Peru as part of its new focus on Latin America.
The Maravilloso mine, owned by Melrose Mines & Minerals, has four manganese ore concessions with reserves estimated at 2.95-million tons and MOIL has shown interest in investing in these assets, sources in the company said.
However, the talks were "tentative" and any final decision would be subject to a value assessment of the asset, production sharing, assured offtake by MOIL and its pricing, the sources added.
Melrose Mines for its part was keen to sign a memorandum of understanding within the definitive timeframe and to appoint an international company identified by MOIL to conduct due diligence and drilling of the four concessions, as well as a fresh assessment of reserves as there was geological evidence that these could be more than the current estimate of 2.95-million tons.
Earlier in 2011, MOIL made futile attempts to secure manganese assets in South Africa, Gabon and Turkey and also to revive a bid for the Democratic Republic of Congo government-owned Kisenge manganese mines.
MOIL operates ten mines across a total area of 1 788 ha that are estimated to have total reserves of 60-million tons or 58% of total mineable manganese reserves in India. The company has drawn up a long-term perspective to ramp up production through the expansion of domestic mines and increased overseas acquisitions to 2.2-million tons a year from current levels of 1.5-million tons a year.
Company officials said that MOIL had renewed its focus on Latin America not only for manganese mining assets but also to increase its iron-ore and coal portfolio.
In fact, MOIL was considering setting up iron-ore asset joint ventures in Amapa province in Brazil with Indian steel producer Rashtriya Ispat Nigam and the largest iron-ore miner in India, National Mineral Development Corporation (NMDC).
Another option being considered by MOIL to mark its foray into iron-ore mining was to financially participate in Legacy Iron Ore, in Australia, in which NMDC recently acquired a 50% equity stake.
Talks between MOIL and NMDC revealed that since Legacy had already been declared India's strategic vehicle for acquisition of coal assets globally, MOIL’s participation would add financial muscle to Legacy's balance sheet in leveraging such acquisitions, an official said.