GJR Group, an iron ore mining company which is foraying into steel production in Andhra Pradesh, has partnered PT Earthstone Resources (PTER) to develop and explore mining projects in Indonesia.

GJR will acquire 50 per cent economic interest in project tenement located near the village Nalo Baru, Sumatra. With an area of 438 ha, the mine has estimated reserves of 100 million tpa of high grade iron ore.

It is learnt that, the estimated sale value of the iron ore deposits in the  project is $10 billion (Rs.40,000 crore) and as  part of the agreement, GJR will invest about $30 million (Rs.120 crore) in mine development. Two special purpose vehicles (SPVs) will be floated to structure the transaction. The first SPV will carry out mine development and the second SPV will carry out marketing activity of the iron ore produced.

The mining work will commence in October 2008, with an initial production target of 3 million tpa.