Consolidated Minerals has announced a major manganese supply deal with India thought to be worth in the order of $28 million, inclusive of shipping costs.
The contract, with a group of Indian steel industry clients, is for the supply of four cargoes of high-grade manganese, totalling 100,000 tonnes, over the next 12 months.
It comes after a recent trial cargo shipment to the subcontinent.
Consolidated Minerals managing director Michael Kiernan said the contract represented a significant first step into the Indian market, which with its large population and increasing consumer demand from a growing middle class, represented an important growth market for carbon steel materials industry suppliers.
He said Indian steel production had increased by 11 per cent in 2003 and stainless steel production there grew by 8 per cent at the same time.
"India is currently benefiting from trade liberalisation and major infrastructure reforms and last year achieved strong economic growth of some 7 per cent," Mr Kiernan said.
The move into India represents a broadening of Consolidated Minrerals’ customer base.
The company has been heavily involved with China and secured some long-term contracts in the eastern European market.
It also has some customers in Taiwan and South Korea and recently concluded smaller contracts to Bangladesh.
Consolidated Minerals recently announced a record $25.1 million net profit for 2003-04, more than double the previous year’s result.
The company has announced that it will pay a 5 cent fully franked final dividend on September 24, taking the company’s full-year payout to 8 cents a share.
The full-year result was struck on a 36 per cent increase in sales revenue to $124.6 million, equating to an earnings per share after tax return of 15.7 cents.
Operating cash flow increased to $45.3 million.
Mr Kiernan said the final result reflected strong commodity demand and prices, driven largely by Chinese demand.
During the year manganese prices reached historic highs.
Consolidated turned out 611,000 tonnes of high-grade manganese ore from its Woodie Woodie operations in the Pilbara. Chromite production from its Coobina Chromite project more than trebled to 243,000 tonnes.
The company sold 606,000 tonnes of manganese and 230,000 tonnes of chromite during 2003-04.
Consolidated also recently entered into a joint venture with Austminex over the Nepean Nickel project.
Through the joint venture Austminex has announced it will issue $1 million worth of its shares to Consolidated at 13 cents a share, restricted from trade or issue for 12 months.
Consolidated will have the right to earn a 65 per cent interest in the Nepean tenements by spending $6 million on exploration within five years.
If Consolidated takes the decision to mine the crown pillar open pit, and pays Austminex $750,000, it will be entitled to 70 per cent of the nickel produced.
