American Stock Exchange-listed blank cheque firm India Globalization Capital (IGC), that owns stake in infrastructure and materials companies, has formed a mining joint venture with Kommu Venkateshwara Metal Miners (KVM) to establish a mine and export facility in Andhra Pradesh.
IGC will pick up a 60% stake in the venture which is expected to focus on mining iron ore over a 500-acre land owned by KVM. It is expected to invest $3 million initially in the venture.
The iron deposits on the property are estimated to be over 100 million metric tonne (MT). The joint venture will have exclusive rights to mine the land in perpetuity and expects to extract 300,000 to 400,000 MT of ore in the first year of production, reaching 1 million MT in the third year.
"IGC, through its subsidiaries in India, has customers in China, operations at ports and experience with mining, transportation and shipping ore from India to China. We have consistently articulated a plan to vertically integrate our iron ore business to maximize our margins. This joint venture represents a significant step to realize this plan at a modest capital cost. China presently consumes about half of all iron ore shipped worldwide. India is the third largest supplier of ore to China and is also a major consumer," said Ram Mukunda, CEO of IGC.
Maryland-based IGC has three core businesses: highway and heavy construction, mining & quarrying, and civil construction and engineering.
IGC's investments include IGC-India Mining & Trading, a Chennai-based firm involved in the export of iron ore to China; IGC Materials, Nagpur-based firm that operates rock quarries and provides construction material to the industry; Kerala-based Techni Bharathi, a construction company located in Kerala and supply side logistics firm IGC Logistics.