OVL to ink agreement for block in Iraq

ONGC Videsh (OVL) is soon likely to sign a concession agreement for oil block - Block 8 in Western Dessert of Iraq, awarded to it by the erstwhile Saddam Hussein regime. It has completed negotiations for the block in which, it will hold 100 per cent interest and invest $250 million (approx Rs.1,250 crore) in the initial exploration phase. The agreement which will be a service contract, outlines that OVL will receive about 18 per cent rate of return on its investment in finding and producing oil from Block 8 and will be allowed to take crude oil produced at the block, to India, as its fee. It will operate the field till it recovers all costs and sets up a joint operating company with a local operator to take over operations.

RINL to scout for overseas mines

The Union government has asked Rashtriya Ispat Nigam (RINL) to form a core group of experts, who would scout overseas opportunities for iron ore mines and coal properties. The mines will be short listed keeping in view RINL's raw materials requirement for at least 40 years. RINL is also planning to ramp up its production capacity to 6.3 million tpa by 2010, with an investment of about Rs.13,000 crore. Its present approved production capacity is over 3 million tpa.

Tata Steel to re-bid for Liberian project

Tata Steel has received an invitation from the Liberian government to participate in the rebidding process for the $1.5 billion (approx Rs.7,500 crore) Western Cluster iron ore project in Liberia. In September 2008, Tata Steel was disqualified from re-bidding on the grounds of act of violation during bidding held for the mines, which were provisionally handed to Delta Mining Consolidated.

Essar Exploration wins two blocks in Australia

Essar Exploration & Production (EEPL) of Essar Group, has won two offshore petroleum exploration blocks in the northern basins of Australia, namely NT/P77 and NT/P78. Essar was competing with global oil majors including Chevron, Exxon Mobil. Having won the blocks, EEPL will be allowed to bring oil and gas to India, but will pay 40 per cent tax on its profits from the blocks, as per norms of the Australian government.

Nalco, UAE company to set up smelter

National Aluminum Co (Nalco) has signed a JV agreement with RAK Minerals and Metals Investment, UAE (RMMI), to set up a 5 lakh tonne smelter at Tanjung Api-api, South Sumatra,in Indonesia, at an investment of around $4 billion (approx Rs.19,600 crore). The project is proposed with a 1,250 MW power plant. Production at the smelter is likely to begin by June 2010, with a capacity of 500,000 tonne of aluminium metal per year, which will require 1 million tonne of alumina for its feedstock to be supplied from India. Nalco is likely to pick up to 75 per cent in the JV and will provide a DPR following various mandatory clearances. Both companies are in talks with Indonesian coal producers for coal supplies.

NMDC Spice postpones acquisition

The present status of declining prices of iron ore, has prompted NMDC Spice International to delay its acquisition plans for two iron ore mines in Armenia. The two mines were of low grade iron ore magnetite needing to undergo benefication and pelletisation, with an additional investment of around 30 per cent, as the quality of ore requires value addition. The two iron ore deposits have reserves of 300 million tonne and 70 million tonne, respectively. Previously, investment for the developing the mines was estimated at $500 million (approx Rs.2,500 crore), but inspite of the investment being lower, the decline in prices have made the venture non-feasible. NMDC Spice International is a proposed JV between NMDC and Spice Minerals and Metals, a part of the Spice Energy Group, UK.