The Hindu : Business : MSPL eyes iron ore mines in Brazil and Australia

Online edition of India's National Newspaper
Friday, Apr 14, 2006

Business

Business

MSPL eyes iron ore mines in Brazil and Australia

R. Chandrakanth

Plans public issue later this year to fund acquisition

HOSPET: MSPL Limited of the Baldota Group is looking at acquisition of iron ore mines in Brazil and Australia, besides foraying into other markets such as Korea and Taiwan. In line with this strategy, the company is planning to go public later this year.

At present, China is the principal market for MSPL. Export income was higher by 88 per cent at Rs. 551 crore in 2004-05 compared to the previous year. The higher export realisation has been due to the pricing in the "spot'' market, fetching about $60 a tonne for its high grade iron ore.

Company sources said the consumption pattern of steel companies in China had been the factor for export growth. The per capita consumption of iron ore in China is 170 kg, the European Union 428 kg and the U.S. 472 kg, much higher than 27 kg in India.

To boost domestic consumption, steel plants had to come up in good number. Present steel production was between 40 and 45 million tonnes and the growth had not been spectacular, hence iron ore companies have had to export.

China sources about 150 million tonnes from Brazil and close to 60 million tonnes from India.

Steel and pellet plants

Besides acquisition, the Baldota group is planning, under RS Industries, to put up a steel plant (about 1.2 million tonne) and a pellet plant (about 1.1 million tonne) in Koppal in Karnataka during the year, with an investment of Rs. 2,200 crore.

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