Indian consortium resumes coal mining in Mozambique

3 February 2017

The Indian consortium International Coal Ventures Ltd (ICVL) will resume coal mining in Mozambique, after having suspended operations in December 2015 due to the sharp drop in international coal prices, announced the consortium’s chief executive.

The chief executive of the consortium, P K Singh, said operations were suspended on that date because of the per tonne price of coking coal had fallen to less than US$80 and added that because of recent price increases operations will resume in the next few months.

In 2014, the consortium bought from Anglo-Australian group Rio Tinto a 65% stake in the Benga mine and 100% of the coal assets called Zambezi and Tete Orient for US$50 million, with the Benga mine, the only one that was active, recording consecutive losses.

The price of coking coal, a key raw material for steel production, increased from US$80 recorded in January 2016 to US$283 a tonne in December 2016, although it has fallen to US$193 in January 2017, according to the Indian Steel Association.

The ICVL consortium is a partnership consisting of five Indian state groups – Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL), National Mineral Development Corporation Limited (NMDC), National Thermal Power Corporation Limited (NTPC) and Coal India Limited (CIL) – which was formed to acquire stakes in mines abroad and ensure the supply of both coking and thermal coal.

Subsequently, the NTPC group decided to withdraw from the consortium, with the argument that the thermal coal operation was not economically viable, and it was followed later by the CIL group. (macauhub)