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India’s International Coal Ventures Limited (ICVL) will invest $500-million to build infrastructure and logistics to support mining at its newly acquired coal blocks in Mozambique. The investments would be made over the next two to three years, as ICVL’s coal blocks would need supporting infrastructure for optimal mining production, including a 500 km railway network connecting pitheads to ports and roads for evacuation of production from the mines, a senior company official said.
Among the coal blocks acquired by ICVL, only one was in production, yielding an estimated five-million tonnes a year. The immediate plan was to ramp this up to around 12-million tonnes a year over the next three years, but this would be dependent on speedy completion of the planned infrastructure and logistics facilities, the official said.
In July, ICVL signed an agreement with mining major Rio Tinto to acquire the latter’s coal assets in Mozambique for an estimated $50-million, and the acquisition deal was wrapped up earlier this month.
The assets included a 65% stake in the Bengal coal reserves and 100% stake in the Zambeze and Tete coal blocks.
ICVL is a special purpose vehicle, set up by Indian government-owned mineral and metal companies, specifically focused on acquiring assets overseas to ensure raw material security for domestic production facilities. The constituents included Coal India Limited, the country’s largest steel producer Steel Authority of India Limited, steel producer Rashtriya Ispat Nigam Limited, iron-ore miner NMDC Limited and power producer NTPC Limited.
It was learnt that NTPC was considering opting out of the consortium as its primary focus on coking coal assets was not in line with its business of power generation, which required thermal grade coal.
Besides the Mozambique acquisition, ICVL had also completed due diligence on five coking coal assets in Australia and the US, with reserves ranging between 30-million and 150-million tonnes, but the official declined to divulge any further details on acquisition negotiations. (By Miningweekly Staff)