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India Globalization Capital Increases Iron Ore Production Capacity
Posted February 7, 2012
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Purchases Mine With Over $225 Million in Estimated Ore Reserves; Increases Production Capacity by 50%; ROI Projected to Be Between 35-45%
BETHESDA, MD -- India Globalization Capital, Inc. (NYSE Amex: IGC), a company competing in the burgeoning Indian and Chinese materials and infrastructure industries, announced today that it has expanded its production capacity by 50% and added 1.8 million tons of iron ore to its reserves.
Mukunda, IGC's CEO, commented, "We are pleased to report that we have purchased mining land adjacent to our present facilities in Linxi, China. Based on the current pricing of $127 per ton, this plot's estimated reserves of 1.8 million tons of 66 percent grade iron ore are valued at over $225 million. This acquisition raises our combined estimated reserves -- including those on our existing property in Linxi and our rock aggregate reserves in India -- to over $590 million."
The Company is also building an additional beneficiation plant on the recently acquired property. The new, technologically advanced facility integrates the dry and wet separators into one continuous process, dramatically reducing wastage and increasing efficiency by 20% over the existing facility. The plant being constructed is projected to come on line by the end of March 2012.
Mukunda added: "We have added photographs of the new plant on our website at www.hfironman.net. The expansion of capacity during the slow winter months sets us up very well for a profitable fiscal year starting April 1, 2012. The new beneficiation plant is projected to increase our production capacity by 50%. The total capital expenditure, for the new mining land and new plant, of about $5.0 million, was funded entirely from existing funds. We expect an unlevered ROI in the range of 35-45% per year, beginning almost immediately."
Both plants extract high-grade iron ore from low-grade ore through dry and wet separation processes. In addition to processing the raw material located on our property, our strategy will be to ship low-grade iron ore from India or nearby Mongolia to the two plants in Linxi for beneficiation and sale to customers in China. On January 25, 2012 Atlas Iron, Australia's No. 4 iron miner, said that demand from China remains strong and at the right price and is expected to pick up after Chinese New Year. We believe that our strategy of processing ore in China, close to our customers, will uniquely position us in the market.
About IGC:
Based in Bethesda, Maryland, India Globalization Capital (IGC) is a materials and construction company operating in India and China. We operate beneficiation plants in China and rock aggregate sites in India. We supply materials to the burgeoning infrastructure industries in India and China. For more information about IGC, please visit IGC's Web site at www.indiaglobalcap.com. For more information on our Chinese operations, including a video on the iron ore beneficiation process, please visit the Web site at www.hfironman.net.
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