Earnings to seize impact of discovery in FY13: Varun Inds

Varun Industries discovered world class rare earth deposits in Madagascar on Tuesday. Analysts expect that this discovery could be a game changer for the company. AP Dhurandhar, vice president of the company said that the impact of the new reserves would be fully captured in the earnings of FY13.

In an interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee, Dhurandhar pointed out that they have discovered 10 blocks of heavy mineral sand deposits in Southern Madagascar. He added, "The total area of the block is 62.5 square kilometres."
He further stated that the blocks have reserves of about 266.8 million tonne and their value ranges from USD 250-1000 per tonne. "The mining life of the deposit is expected to be approximately 40-50 years taking into account the heavy mineral content," he explained. Below is the verbatim transcript of the interview. Also watch the accompanying video. Q: What you have discovered in Madagascar?
A: Varun Industries has discovered heavy mineral sand deposit in Southern Madagascar in the Anosy province. There are 10 blocks, each block measuring around 2.5 kilometres by 2.5 kilometres with a total area of 62.5 square kilometres.
The heavy mineral sand deposit contains around 266 million tonne of heavy minerals consisting of ilmenite, rutile and leucoxene which are titanium bearing mineral.
Ilmenite is 221 million tonne. Apart from these minerals, zircon, garnate, sillimanite and monazite have been also found there. We have discovered around 9.2million tonne of monazite and 18.4 million tonne of zircon. As much as 1.84 million tonne of leucoxene and rutile, and about 2.76 million tonne sillimanite has also been found there. Q: What is the market value of each of these products at this point?
A: The market value varies. Ilmenite, rutile and leucoxene are in the range of approximately USD 400-1000 per tonne. Monazite is around USD 600-900 per tonne. Lowest among these mineral assets are garnate and sillimanite which are in the range of USD 250-400 per tonne. Q: What is the market value of this discovery?
A: We are in the next stage of Scoping Study, wherein we will be analysing the mineral content for elemental analysis of each mineral. We will come out with the exact market price of these minerals. It is too early to comment on the exact market price. Q: That is a multi billion dollar discovery. Over what period of time can this entire reserve be mined?
A: Normally, mine life is taken as 35 years. Considering the amount of deposit discovered here, it should be around 40-50 years mine life. Q: When can you commence mining and selling the discovery?
A: Since it