Rio Tinto posts loss of US$53 million in Mozambique

8 August 2014

The Anglo-Australian Rio Tinto mining group has registered a US$53 million first half-year loss in its Mozambican coal project, whose main mineral assets were recently sold to International Coal Ventures Private Limited (ICVL), a group of Indian state-owned firms.

Although revenue from the sale of coke and steam coal reached US$40 million, up 8 million year-on-year, the mining group again suffered losses, though less than in the first half-year of 2013, when it lost US$62 million.

In the 2014 annual report on the group’s global operations, which indicated earnings of US$5.1 billion, Rio Tinto indicated it had invested US$9 million in the Mozambican project, in a context in which the company’s material assets were assessed at US$143 million.

Rio Tinto justified the weak results as being due to falling international coking coal (US$132 per ton) and steam coal (US$76 per ton) prices, stressing that local production “was affected by constraints” in transportation (rail and port) and unexpected work stoppages caused by security problems.

“Despite this, demand from the main markets of Japan, [South] Korea and Taiwan remained strong,” the text states, going on to inform the group’s investors that “the Benga coal mine and other projects in Tete province” were sold to ICVL for US$50 million at the end of last month.

Despite negative results at the Benga mine, in which the Indian group Tata Steel Ltd holds a 35 percent stake, ICVL expects to increase annual production to 13 million tons within three years.

Coking and steam coal production at the mine was not more than 1.6 million tons in 2013, indicate Rio Tinto reports released at the beginning of this year.

ICVL was set up by the Indian government to purchase coal mines abroad and comprises several of the country’s leading public corporations, namely the Steel Authority of India Limited, Coal India Limited, Rashtriya Ispat Nigam Limited, National Minerals Development Corporation Limited and National Thermal Power Corporation Limited. (macauhub/MZ)