Coal India leaves state consortium exploring coal in Mozambique

25 February 2015

The Coal India Ltd group (CIL) has decided to leave the International Coal Ventures Ltd consortium (ICVL), founded by Indian state companies to acquire and explore coal assets abroad, according to a statement filed with the Mumbai Stock Exchange.

In a statement, the group said only that the board of directors had decided to leave the consortium, after previously noting that remaining in that group of companies led only to an increase in cost without corresponding benefits.

The consortium was formed in 2009 as a “vehicle which a specific purpose” by public sector steel companies, Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Limited (RINL), the largest producer of iron ore, National Mineral Development Corporation Ltd and Coal India with a registered capital of 100 billion rupees (US$1.62 billion).

The news of CIL’s departure comes just days after the company told the Platts news agency that in September it would decide on the future of its operations in Mozambique, particularly in Moatize, in Tete province, depending on the quality of the coal mined in this area.

In July 2014, ICVL paid US$50 million to acquire the coal assets of Anglo-Australian group Rio Tinto in Mozambique.

The deal, closed in early October, involved all the mines that Rio Tinto owned in Zambezia and Tete provinces and 65 percent of the Benga reserves (also in Tete) and for which Rio Tinto had paid more than US$3 billion in 2011 to Riversdale Mining. (macauhub/MZ)