Mining in Madagascar
Varun Industries Ltd has diversified into Mines and Minerals in Madagascar by acquiring various mineral assets in Uranium, Heavy Mineral Deposits, and Gold.
Varun Group, Madagascar through its two different operating wings; Varun International SARL and Madagascar Energy Corporation, have been awarded Uranium mining permits for 379 & 732 blocks, respectively in Madagascar. The blocks cover 6950 sq. km, with a reserve level of about 1.7 MMt. of Uranium, 4.35 MMt. of Thorium and 53,000 Kg. of Gold.
The company has also discovered 10 blocks of Heavy Mineral Sand deposits covering 62.5 sq. km., having resources of about 266.8 million tonne. Varun has signed an MOU with a PSU under Department of Atomic Energy, to sell entire Heavy Mineral Concentrate (Rare Earths) in India. The company plans to set-up a processing plant by FY 12-13 with an investment of about Rs 250 crore ($ 50 million) and would produce approximately 0.5 Million Metric Tonne per annum of Heavy Mineral Concentrate.
These commodities find wide use in high-tech industries including precision weapons, lasers, radars, hybrid cars, etc. They are in short supply with China controlling nearly 97% of its global reserves. China has recently been restricting the supply of rare earths by declaring it as a strategic resource, which in turn has resulted in prices of rare earths increasing by 1000% in two years. The exploitation of these reserves of precious metals are being fast tracked and they promise to unlock tremendous value for the company.
Varun has discovered unique reserves of Gold in Madagascar. This is the first time in the history of gold exploration in Madagascar that reserves of such quality have been proven out. According to the tests & report analysis by experts, it has been found that one Metric Tonne of the ore contains gold ranging between 9 - 16.5 gm, which is significantly high as per international standards & norms, where gold mineral mines have only 6 - 7 gm/Ton proposition.
Varun has an ongoing joint venture with Australia based Torian Resources NL (Previously known as Cluff Resources Pacific NL). The said JV runs for exploration and exploitation of Gold, Platinum and precious stones. VTI (Varun Torian International SARL) the SPV company, has been established to operate the said joint venture in Madagascar.