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TheStreet Open House

India Globalization Capital Completes Test Delivery Of Iron Ore

Stock quotes in this article: IGC

Bethesda, June 11, 2013 (GLOBE NEWSWIRE) -- India Globalization Capital, Inc. (NYSE MKT: IGC) announced the achievement of a milestone in the execution of its strategic plan. IGC has completed a test shipment of 300 tons of iron ore from Mongolia to China.  As previously reported, the Company established a shipping hub at the border of Mongolia and China to provide iron ore to its customers in China and source raw materials.

Ram Mukunda, CEO of IGC, said, "Importing from Mongolia has important strategic value.  Our beneficiation plants process low-grade ore into high-grade ore. It has been our plan to diversify the source of raw materials, from India and Mongolia, to include grades of ore that are of substantially better quality than our reserves.  This test delivery has been a big step for IGC in delivering on the opportunities before us."

Mr. Mukunda spoke of the comparative benefits of IGC's strategy for its anticipated Mongolian reserves. He continued, "On our mine sites in Inner Mongolia, we have reserves that are 2 or 3% Fe content, which is processed into 66% Fe ore using a dry magnetic separation process and a wet magnetic separation process. The 66% high-grade ore is then sold to steel mills. 70 truckloads of raw material are required to produce two truckloads of higher-grade iron using the dry separation process, and the two truckloads of higher-grade ore are subsequently processed through the wet separators to produce the end product of one truckload of 66% high-grade ore. This process is profitable at higher levels of iron ore pricing.  But both Mongolian and Indian ore have a base level of 40% to 50% Fe content, and in order to process these for use in steel mills, we employ just the wet separator and thus achieve considerable cost savings in producing the desired product.  To illustrate, 1.3 truckloads of this type of ore can be used to produce one truckload of 66% high-grade ore. Overall, this is higher margin production and is profitable even at lower sale prices."

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