NMDC to form SPV for Andhra iron-ore mining venture

NMDC Ltd, the public sector mining company, is all set to test the iron ore potential in Andhra Pradesh. The miner is in the process of forming a special purpose vehicle with the Andhra Pradesh Mineral Development Corporation (APMDC) to explore the iron ore potential in the state.

“We are likely to finalise the terms for an SPV by November 30. Once that is done and we finalise a plan to start exploration; it would take at least 12 months to come to a conclusion on the available reserves in the state,” NMDC chairman and managing director Rana Som told DNA Money.

Iron-ore mining in Andhra Pradesh has become a politically sensitive issue. Currently, the Congress-led government is in a fix over a lease granted to Obulapuram Mining Company (OMC) of Karnataka’s BJP leader Gali Janardhan Reddy.

With the opposition political parties alleging that the former chief minister Y S Rajasekhara Reddy’s son Y S Jaganmohan Reddy has an interest in OMC forcing the government to relax certain mining norms, the issue of iron ore mining has gained political significance.

“We spoke directly to the chief minister (K Rosaiah). As far as we are concerned, there is no politics involved in the issue of joining hands with APMDC,” Som said.

“There are several locations in AP, which are unexplored. Except one or two where OMC is currently working, there are other locations that have never been touched. We are going to focus on them to begin with,” he said.

OMC’s mines are currently located on AP-Karnataka border in Anantapur. Studies have shown there was significant iron ore potential in other districts such as Kadapa, Kurnool and Chittoor.