Australia’s Minemakers ejects NMDC from JV

Australia’s Minemakers, which has the world’s largest undeveloped rock phosphate mines in its fold, seems to have dumped NMDC from a joint venture partnership.

Minemakers was in the process of forging a strategic partnership with NMDC for developing Wonarah phosphate project. However, the Australian company seems to be scouting for a new partner.

According to a filing with the Australian Stock Exchange, Minemakers has formally commenced a process to attract and select suitable parties interested in a joint venture arrangement on Wonarah.

Potential partners are likely to be major players in the phosphate value chain from several different countries.

“NMDC’s inability to make timely decision to progress a partnership with Minemakers has been disappointing and after expiry of the exclusivity period, Minemakers has been approached and subsequently engaged in preliminary discussions with several global fertiliser manufacturing and trading companies. The Minemakers board has decided that it can no longer prolong discussions with NMDC. The discussions remain inconclusive whilst NMDC seeks further input from the department of fertilisers, government of India and therefore the board has determined that it will pursue alternative potential JV partners through a coordinated strategic partnership process,” Minemakers said in the filing.

In 2010, Minemakers determined that due to the very large resource size and favourable proximity to key regional markets, Wonarah was most likely to be optimised as a vertically integrated fertiliser production operation.

This warranted the introduction of a well-funded and highly regarded joint venture partner to complete the feasibility of the project and to assist in securing development funding.

In June 2011, Minemakers entered into a non-binding MoU with NMDC. The MoU had an exclusivity period that expired earlier this year and the MoU itself expired in early June 2012.

“Wonarah is one of few major undeveloped rock phosphate deposits in the world and it is ideally located in a politically stable jurisdiction, has significant infrastructure already in place and is well located ot access major regional markets. We see these favourable characteristics together with increasing phosphate prices as the key drivers to attracting a joint venture partner,” Cliff Lawrenson, Minemakers’s CEO, said in the filing.

However, Minemakers has still kept the window open for NMDC and said that it would open to NMDC participating in the fresh process of induction of a partner.