The Hindu Business Line : Tata Steel to buy 35% in Australian co Riversdale’s Mozambique Coal Project

For this, Tata Steel and Riversdale Mining Ltd, Australia, a company listed on the Australian Stock Exchange, have entered into a memorandum of understanding (MoU) through which Tata Steel will become a strategic partner in Riversdale’s Mozambique Coal Project.

The Mozambique Coal Project includes the premium hard coking coal in Benga and Tete, in the Tete province in Mozambique. These assets are fully owned by Riversdale through its subsidiary. The Benga and Tete tenements together cover an area of 24,960 hectares. Mozambique had been a coal producer under the Portuguese rule, but the industry had fallen apart along most the economy during the first decade of independence. The present government has been welcoming to foreign investments.

The Riversdale management expects that the potential mineralisation of the area will be substantially high.

The Australian mining company’s stock has been in the limelight in recent times having trebled in value in the last one year. The MoU contemplates the relationship between Riversdale and Tata Steel to develop the project. Riversdale is currently conducting a scoping study, which is likely to be completed in August. The definitive agreements are expected to be finalised and executed by November 30, the company informed the BSE here on Friday.

The hard coking coal derived from this project will be supplied to the Corus facilities in the UK and Europe and also to the company’s enhanced requirement in India in the future.

Mr B. Muthuraman, Managing Director, Tata Steel Ltd, said, “The memorandum of understanding with Riversdale is in the Tata Steel’s stated strategy of progressing towards raw material security for its global business. This partnership gives Tata Steel an opportunity to jointly explore part of a large coal basin which could prove to be a potential source to meet part of the raw material requirement and enhance the long-term competitiveness of the global operations.”

The completion of the transactions contemplated by the MoU is subject to completion of due diligence, definitive agreements, and Board approval of both companies and regulatory approvals.

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