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NSL Consolidated Delivers Milestone First Saleable Iron Ore From Kurnool Plant, India

NSL Consolidated (ASX: NSL) has reached a milestone, producing the first saleable beneficiated ore during commissioning of the phase one Kurnool iron ore dry separation plant in India.

A beneficiated grade of up to 58% iron ore was achieved, with further process optimisation underway. A 58% iron ore product sells domestically for about US$90 per tonne.

Given the strength of the domestic Indian iron ore market in both demand and pricing, NSL has said it may prioritise domestic sales at the gate ahead of export opportunities.

The Kurnool stockyard in southeast India is a 12 acre industrial site located adjacent to NSL's existing Kuja iron mine in Andhra Pradesh. The stockyard will source its iron from the nearby Mangal iron ore mine.

Start-up commenced at Mangal in March to produce the first mainstream ore that will provide sustained plant feedstock once the plant moves from commissioning to steady state production.

Stockpiles from Mangal are being transferred to the stockyard to use as beneficiation plant feedstock.

Commissioning on individual equipment components for the Phase One crushing, screening and dry separation dry plant is continuing

NSL is targeting an initial steady production rate of 200,000 beneficiated tonnes per annum from the first phase of operations at Kurnool, and is on track to achieve sales revenue from the Kurnool plant in the first six months of 2012.

The company expects to maintain saleable grades of up to 58% and increase the small scale volumes as it ramps up operations at the phase one plant.

Meanwhile, NSL is nearing completion of the phase two wet iron ore beneficiation plant, which will be capable of producing product grades of between 58% and 62% iron.

As part of the phase two beneficiation process, the wet beneficiation plant will continue to be constructed and commissioned through the first half of 2012, with completion and first sales contribution in the first six months of 2013.

Work is underway to determine the potential to increase the production over and above the targeted rate of 200,000 tonnes per annum with the incorporation of phase one and two production.

Potential for Growth

NSL is continuing to assess complimentary new bulk commodity mining opportunities to expand its potential production base in Andhra Pradesh.

During the December quarter the company continued to progress several opportunities for either outright acquisition and/or joint venture structured agreements over multiple projects across India, together with additional Australian coal tenements.

The company's dual bulk commodity focus provides it with the opportunity to link its maiden iron ore start-up operations and first revenues with its exploration and development of the Queensland thermal coal assets.