India Globalization Capital (IGC) has announced that it has entered into a contract for the sale and purchase of Iron Ore with Mon Resources International LLC .The contract involves shipping of Iron Ore mined in Mongolia. IGC which is listed on the NASDAQ saw it’s share price jump by 12% on the announcement of this deal.
India Globalization Capital Iron Ore Contract terms
The contract terms include the shipping of 126,000 metric tons of 54% Fe content to be delivered to the India Globalization Capital hub setup at the border of Monoglia and China. Here the ore will be beneficiated to 66% Fe content after which it will be sold to steel mills in China. The shipments are expected to begin in the month of August 2013 with projected aggregate revenue generated could be between US$ 10 million to US$ 12 million based on variations in pricing and favourable profit margins.
Speaking to the media, Ram Mukunda, CEO of India Globalization Capital said that this order is a follow on to the successful 300 metric ton test shipment done a few months ago. He further added that though the contract was based on the current low pricing environment for iron ore , he expects the transaction to increase in profitability later in the year. He further elaborated on plans to consolidate the iron ore mines and beneficiation plans set-up in inner Mongolia.
Mining Industry in Mongolia
Recent developments in Mongolia point towards a favourable atmosphere for the mining industry as the recently concluded presidential elections provide the much needed political stability. The president of Mongolia was elected on a progressive platform with a vision to integrate Mongolia into the global economy. It was under his leadership that the Mongolian government amended it’s Foreign Investment Law which has encouraged private companies from around the world to invest in Mongolia.
About India Globalization Capital
IGC operates through it’s various subsidiaries which include IGC-India Mining & Trading, Private Limited (IGC-IMT) a company head-quartered in Chennai and is engaged in the export of iron ore to China, it also has other subsidaires like IGC Materials Private Limited. (IGC-MPL) , Techni Bharathi Limited (“TBL”), IGC Logistics, Private Limited (IGC-LPL) etc. To know more about the company visit their website.