Jindal Steel and Power Ltd on Thursday said it is not acquiring Afferro Mining.

Low grade magnetite and related problems in beneficiation, new mining code in Cameroon, financial unviablility, lack of infrastructure (road, rail, port, power) are the major deterrants, the company said in a statement.

"JSPL has withdrawn discussions of acquisition for the Afferro Mining site in Cameroon as the mutual exclusivity period between both the companies has ended without any conclusive outcome," Naveen Jindal-promoted JSPL said in its release.

"We have already shared our intent with Afferro Mining and asked them to inform their stock exchanges accordingly about the withdrawal of our intent, as they had earlier informed them about being in talks with JSPL," it added.

The deal with Afferro Mining did not materialise because much of the proven iron ore reserve at the Afferro site in Cameroon is low grade magnetite for which beneficiation reports have not been satisfactory.

At the same time, the initial reports suggest that beneficiation to the desired percentage will be possible at high costs and low yields thus reducing the overall potential of the deposit.

Afferro has four major concessions of the two biggest and explored concessions are due for renewal in 2013. Some uncertainty has also been caused due to the new mining code in Cameroon under which companies can seek exploration permit for seven years only. The seven year period for both the major concessions is expiring in 2013. In addition, 50 per cent of the licence area will have to be given back to the Government, if at all an extension is provided under special conditions.

The future potential of the area, thus, remains unclear, the Indian company said.

JSPL is at advanced level of discussions with many parties in Africa for iron ore mines.

>siddhartha.s@thehindu.co.in

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