RIO TINTO, NMDC TO JOINTLY EXPLORE MINING RESERVES

Business Standard
August 13, 2008, 16:09 IST
New Delhi

Global mining major Rio Tinto and state-run NMDC Ltd are set to enter
into an agreement to explore global and domestic iron ore reserves,
a top official of the Indian company said.

"We will be entering into a memorandum of understanding (MoU) with
Rio Tinto on August 18 for scouting mining resources in different
parts of the world including in India," NMDC Chairman Rana Som said
over phone from Hyderabad.

The MoU envisages a strategic partnership between the two
leading mining companies for prospecting iron ore reserves, both
internationally and domestically, he added.

"The two companies may also contemplate entering into a joint venture
once they identify mining properties," Som said.

NMDC has already entered into a joint venture agreement with country’s
Spice Energy and is about to acquire iron ore mines in Armenia,
Eritera and Congo.

Asked about the price negotiation with Japanese and South Korean steel
mills for supply of iron ore, the NMDC Chairman said the matter was
pending with the government.

"We have made our point that high freight charges and ad-valorem
export duty on iron ore are hitting our margins. It is now up to the
government to decide whether we should seek higher price for our high
quality iron ore from Japanese and Korean mills or not," he said.

NMDC is seeking up to 97 per cent increase in iron ore prices from
foreign steel makers, a move that could have similar repercussions
on the domestic market, which may result in higher steel prices.