NSL Consolidated Ltd (ASX:NSL) Managing Director and CEO, Cedric Goode, provides an update on the company’s Phase 2 wet beneficiation plant, first sales and steel ambitions.
Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from NSL Consolidated Limited (ASX:NSL) is Managing Director and CEO, Cedric Goode. Cedric, welcome back.
Cedric Goode: Thanks, good to be back.
Carolyn Herbert: For investors who aren’t familiar with NSL Consolidated, can you start by giving us an overview of your assets and where you’re at with production?
Cedric Goode: So over 8.5 years, we’ve acquired six mining leases in India, in the south-eastern Indian State of Andhra Pradesh. And we’re focused on low-grade iron ore beneficiation. We’ve also been through the process of establishing two beneficiation plants. One being a dry beneficiation plant and the second being a wet beneficiation plant, in India to support the operations.
Carolyn Herbert: Now to the Phase Two plant and sales. Can you tell us about the first run of the plant and its capacity?
Cedric Goode: The Phase Two wet beneficiation plant is a plant that has a nameplate capacity of 200,000 tonnes per annum, of product ranging between 58 and 62 per cent concentrate. We have been able to produce a higher-grade concentrate and we’re working with our Chinese partners, to be able to routinely produce plus 63. Just this week we announced our first sales from that plant, which was very exciting for the company. And now we’ll start to see routine payments and sales from the plant, for the company.
Carolyn Herbert: Now to sales, can you tell us about the order from Infinity Ores?
Cedric Goode: We actually have two orders from Infinity Ores, the first one being for 20,000 tonnes of 63-grade concentrate, at approximately $AUD65 per tonne ex mine gate. And just last week, we announced a second order from Infinity Ores for an additional 20,000 tonnes of 60 to 61-grade concentrate. A slightly higher price, $AUD67 a tonne and that’s reflected by the strengthening iron ore market in India, over the course of the last month.
Carolyn Herbert: So who are Infinity Ores and do you expect them to be a repeat customer?
Cedric Goode: Yes, so Infinity Ores are a buyer for Indian steel mills. So they’re consistently purchasing material in the Indian domestic market now, for existing steel mills. We’ve been working closely with Infinity Ores for quite some time and we expect for the sales orders, to continue into the future.
Carolyn Herbert: Now to financials, what’s your current cash position and are you fully funded?
Cedric Goode: We are in a very good position from a cash perspective. As of the end of last quarter, we had approximately $2.6 million in the bank. And just with the recent announcement of first sales, where now those sales will be ramping up. So we’re very comfortable with our position and we’re very excited.
Carolyn Herbert: A more general question now about the Indian economy and iron ore prices. What’s the Indian Government doing to promote infrastructure?
Cedric Goode: Well there’s significant investment occurring in infrastructure in India, from both Government and also from private parties. We’re seeing the Indian economy now, as the fastest growing economy in the world and India is now, the second largest producer of steel in the world. So as the investment in infrastructure increases, so will the demand for steel and hence, so will the demand for iron ore. And we’re perfectly positioned to be a part of that increase in demand.
Carolyn Herbert: So what effect has this stimulus had on domestic iron ore prices?
Cedric Goode: We’re seeing in India the iron ore prices have been very strong for quite a period of time, on the back of that steel growth. So when the global economy and iron ore prices were decreasing, India was staying relatively flat. In the last little while, it’s just started to increase a little bit. So we’re seeing some strong pricing domestically ex-mine gate in India, which is a great opportunity for our company.
Carolyn Herbert: Finally Cedric. What’s your goal for the next six months and your long-term ambition for NSL Consolidated?
Cedric Goode: Over the course of the next six months, we’re really focusing on hitting nameplate capacity in the coming months for the existing plant. And then an aggressive ramp up plan for iron ore beneficiation, we’re doubling the existing plant capacity. And then moving forward, we’re looking to increase our iron ore production to 2.5 million tonnes, by the end of 2019. The Government has just allotted us land for pellet plant and also for a steel plant. So we’re looking to further move down the barrier chain.
Carolyn Herbert: Cedric Goode, thanks for the update on NSL.
Cedric Goode: Thank you for having me.