NMDC Ltd., India’s biggest iron-ore producer, plans to buy a deposit in Canada in its first overseas venture, as it seeks to increase supply of the steelmaking raw material. The deposit contains more than 1 billion tons of iron ore, Rana Som, chairman of the Hyderabad-based company, said in a telephone interview. He declined to give details as he expects to conclude talks in a couple of months.

The deposit will increase supply for NMDC, majority-owned by the Indian government, as demand from India and China surges. Annual contract prices of the commodity have risen the past five years and may jump 80 percent from April, according to a Bloomberg News survey of four analysts published Feb. 8.

”Indian companies are in a hurry to secure supplies as China and India’s demand for steel will keep prices at a record,” Vishal Chandak, an analyst with Emkay Share & Stock Brokers Pvt., said in Mumbai.

NMDC, which supplies Essar Steel Ltd. and JSW Steel Ltd., has jumped more than fourfold in Mumbai trading in the past year. It rose 5 percent to 10,236.95 rupees at 12:51 p.m. in Mumbai.
The company will increase production of the raw material by 10 percent to 33 million metric tons in the year starting in April to meet rising demand, Director V.K. Jain said Feb. 12. The company accounts for 16 percent of India’s iron ore output of 176 million tons.

New Millennium

The Canadian iron ore industry exported 30 million tons last year, according to resourceinvestor.com. In April, Essar’s parent agreed to buy Minnesota Steel Industries LLC for an undisclosed sum to add 1.4 billion tons of iron-ore reserves and a steel mill in North America.
Canada’s New Millennium Capital Corp. is looking for investments in iron-ore projects in Newfoundland, Labrador and Quebec, Robert Martin, chief executive officer of the Calgary- based company said in a telephone interview.

”We’ve been in contact with most of the major steel companies including Indian.”
Both Martin and Som declined to comment on whether the two companies are in talks.
NMDC said Feb. 12 it has reserves of 60 billion rupees ($1.5 billion) to fund acquisitions.

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