Coal price affects Indian consortium’s results in Mozambique

15 August 2014

The Mozambican coal mine recently acquired by India’s ICVL consortium posted a loss of US$35 for each ton of extracted coal, said the financial director of the Steel Authority of India Ltd (SAIL).

Production costs at the Benga mine are currently US$165/166 per ton, while the sale price for that same ton is around US$130, Anil Chaudhary said during a conference with investors.

The state-owned SAIL leads the International Coal Ventures Pvt. Ltd (ICVL) consortium. It imports about 85 percent of its consumption of coking coal, a fundamental raw material for steel production.

Cited by Mint New Delhi, Chaudhary explained that coal mined in Mozambique will also be consumed by Rashtriya Ispat Nigam Ltd (RINL), given that the National Mineral Development Corp. Ltd (NMDC), another consortium member, has yet to begin steel production.

Last July the Anglo-Australian Rio Tinto group agreed to sell the Benga mine and two other mining assets, Zambeze and Tete Oriental, to the consortium of India state-owned enterprises for US$50 million. SAIL will hold a 48 percent stake and NMDC and RINL 26 percent each.

The Rio Tinto group paid nearly US$4 billion for those assets when it acquired the Australian company Riverside Mining in 2011. (macauhub/MZ)