Indian consortium to invest US$300 million in Mozambican coal mine

11 August 2014

India’s International Coal Ventures Ltd (ICVL) consortium plans to apply US$300 million to expansion of the Benga coal mine in Mozambique, the company’s executive chairman C.S. Verma told the newspaper The Times of India.

Verma also heads the state-owned Steel Authority of India Ltd (SAIL). He said the consortium has begun formal talks with the likewise Indian Tata Steel, which controls a 35 percent stake in that mine.

The ICVL consortium includes the state-owned Steel Authority of India (SAIL), Rashtriya Ispat Nigam (RINL), National Minerals Development Corp (NMDC), Coal India and NTPC (previously known as the National Thermal Power Corporation). It acquired the company Rio Tinto Coal Mozambique for US$50 million.

The latter company controlled the coal assets of the Anglo-Australian Rio Tinto group in Mozambique’s Tete region, namely the Benga mine (65 percent), the Zambeze mining concession and the Tete Leste exploration licences and associated coal exploration licences as well as Benga Energia.

Verma told the newspaper that the top priority will be to increase production from the current 5 million tons per year to 11/12 million tons in the next three or four years and then 16 million tons a year later. To achieve that production increase the consortium will have to invest nearly US$300 million, he said.

Regarding other coal assets, the ICVL chairman said they would only be evaluated in three or four years, “because our immediate priority is the Benga mine.”

He announced that a team of 25 to 30 people would be sent to Mozambique to take control of the operations, adding that the first shipment of coal mined at Benga should reach India next December “at a price probably lower than what we are currently paying.” (macauhub/MZ)