ID Codes:  ISIN GB00B4323X41 / WKN A1JHWC/CUSIP G05900 108

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Iron Ore, Orissa, India

Orissa is one of the largest producers and leading exporter of iron ore, with the iron ore produced generally used domestically in Indian steel mills and the fines generated are exported, mainly to China. Astra has identified four iron potential mines for acquisition, three located in Keonjhar and one in Mayurbhanj, that have the potential to become iron ore export provinces.
 
Orissa’s iron ore mines are generally of high grade (+60% Fe) with large reserves located in the two districts of Mayurbhanj and Keonjhar. These two districts constitute the major iron ore producing regions of Orissa and produce the majority of the ore mined in the state.

The mining scenario in Orissa compares very favourably to larger areas such as the world-class iron precinct of Western Australia. The relatively low cost of operation and infrastructure enable mines in Orissa to operate profitably.

Western Australia generally has large scale mine operations with a peak through put capacity of 5mMTpa as iron ore export infrastructure imposes massive costs on the mines and makes small scale mining operations (less than 1mMTpa) uneconomic.
 
The iron ore mines in Orissa are comparatively smaller and the majority of them are in the range of 100,000 tonnes and less per annum. Costs are saved as there is lesser mechanisation and lower operating cost as a result of local manpower, cheap labour and a very low level of technology penetration. The ore is transported inexpensively and exported to China through Paradip Port, where Astra has its own plot. Alternatively, the iron ore can be sold locally to the Orissa/West Bengal steel mills. In both respects, Astra has leasehold over land near Paradip Port for storage and have acquired a number of trading licenses, along with an export code.
 
By selectively mining high grade areas for direct shipping, blending and processing costs can be reduced and only crushing and screening needs to be carried out post mining – thereby delivering project advantages.  


The Project

Astra’s initiative in India is diversified across commodity trading (primarily iron ore fines), iron ore mine acquisition and steel manufacturing.

Astra is negotiating acquisition of up to three iron ore mines in the Keonjhar district of Orissa, near the village of Sanputuli, bearing high grade (+60% Fe) hematite deposits. These sites form part of a cluster of iron ore mines that have been identified as meeting Astra’s strict screening criteria.
The largest of these mines, which was previously operational, can be brought back into operation within 12 months with the renewal of a mining license (RML) and application for an environmental permit. Mining equipment is present on the site, and the Government national railway network is 4 kilometres from the mine.     
 
Upon completion of the acquisitions, Astra’s total reserve is bound to significantly increase. Acquiring such reserves in the same state will provide ample economies of scale as production capacity is maximised at the mines.

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Astra has also acquired the relevant trading licenses to enable the Company to begin trading iron ore fines for both domestic and export purposes. These include trading licenses covering the Koira Mining Circle in the Sundergarh district and the Joda and Barbil areas in the Keonjhar district of Oriss State, India. Astra is also in the process of securing a third trading license which will allow the Company to sell and transport third-party mined iron ore directly to buyers and enabling the use of Government logistics infrastructure, including railways.