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India Globalization Capital, Inc. (IGC) Doubles-Down On Chinese Steel, Opens New Hub On Border With Mongolia To Source Supply

|Includes: India Globalization Capital, Inc (IGC)

India Globalization Capital, which is diversified into related mining, materials, infrastructure, and logistics areas via its family of 100%-owned subsidiaries, reported good news today out of their HK Ironman unit (which owns 95% of Linxi HeFei Economic & Trade Co., Ltd., aka PRC Ironman) that runs an iron ore beneficiation plant on 0.85 square miles of hills outside Chifeng, with ore deposits in the neighborhood of 3M tons, as a new and key shipping hub has been established by the company on the Mongolia-China border.

CEO of the Bethesda, Maryland-based IGC, Ram Mukunda, looked back with pride on six strenuous months of planning, negotiations, and prep work culminating in today's announcement and noted how the company was already putting their new limb to the test with a 300 ton shipment. Mukunda projected a rapid up-scaling of throughput after this test delivery is completed in the next week or so, with a leading target set between 8k and 12k tons per month, a considerable beefing-up of the company's overall throughout capacity.

This new hub is part of IGC's long-term strategic growth plan and will serve from an ideal location, the vital role of both a sourcing point for the company's beneficiation plants and an output node for the many, many iron ore customers IGC has access to in China. A total portrait of this new capacity shows how the ideally-positioned hub can not only deliver a variety of grades of ore, but do so expeditiously and from sourcing points which were virtually nonexistent only a handful of years ago.

Looking back to around 2008, at the time when PRC Ironman was founded, there were almost no real sources of iron ore exports in Mongolia. The meteoric rise since then by IGC, driven by strong demand for iron ore, has mirrored the expansion of resource production capacity in Mongolia, with some 5.75M tons coming out of the country last year, up a whopping 61% over 2011 alone (according to top regional investment analysis firm Mongolia Asset Management).

Even now, the demand from Chinese steel producers for quality iron ore is immense and IGC is intent on capturing the premium profitability metrics here by continuing to open up Mongolia as a resource supplier. This shipping hub is a necessary piece of the puzzle for IGC's long-term delivery and refining aspirations, investors will want to keep an eye on the company in the next few weeks for more news about the hub once the initial test shipment is finished.

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