The Hindu Business Line : Tata Steel, Riversdale to invest in Mozambique

Mumbai, Oct. 30 Tata Steel and Australian Stock Exchange-listed Riversdale Mining have proposed to invest $270 million (Rs 1,279 crore) to undertake the initial stage-one development of the Benga Coal project in Tete province of Mozambique.

Funding for stage one of the project will be provided by Tata Steel and Riversdale in their respective proportions (35:65) from existing cash resources or any other alternative means, the company said in a press release.

Riversdale Mining currently has Australian $268 million cash to fund its share ($175 million) of the project. Construction is expected to commence before year-end upon receipt of final environmental approvals.

Tata Steel and Riversdale have formed a 35:65 joint venture company Benga Coal Project for developing the coal field. Tata Steel also owns 19.38 per cent stake in Riversdale through its subsidiary Tata Steel Global Minerals Holdings Pte Ltd.

“We are committed to bringing the Benga Coal Project into first production during 2010, and we will be supplying the world’s coking coal markets in 2011 initially through our relationship with project partner Tata Steel in India,” said Mr William Michael O’Keeffe, Executive Chairman, Riversdale, in an ASE filing.

Stage one of the project entails initial production of 5.3 million ROM (recycled organic material) tonnes a year to produce about 1.7 million tonnes per annum (mtpa) of high quality hard coking coal and 0.3 mtpa of export thermal coal.

The latest development comes after the review of a feasibility study of the project.

The study outlines three stages of development to align with the completion and subsequent expansion of rail, port and river barging infrastructure in Mozambique.

The stage-two expansion by 2014 will include the installation of a second module of the coal preparation plant and increase ROM production to 10.6 million ROM tonnes a year to produce 3.3 mtpa high quality coking coal and two mtpa export thermal coal.

The final stage is anticipated to increase coal production to about 20 million ROM tonnes annually trough installation of two additional coal preparation plant modules.

The decision on the timing of the future expansion stages will depend on future coal market conditions and the availability of port, rail and barging capacity at that time, the release said.

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