The Hindu Business Line : Tata Steel inks pact with Riversdale

Mumbai, Nov. 30 Tata Steel has signed a joint venture agreement with the Australia-based Riversdale Mining Ltd for a 35 per cent stake in Riversdale’s coal mining project in Mozambique, the company said on Friday.

The Indian steelmaker will pay about Australian $100 million (US $88.2 million or Rs 352 crore) for the stake; it will also secure a 40 per cent share of the coking coal offtake from the project.

The coking coal from Mozambique will be supplied to the Tata Steel Group’s facilities in Europe, Asia and elsewhere.

“The company is keen on increasing its captive base for raw materials (both iron ore and coal) for its global operations,” said the Tata Steel Group Chief Financial Officer, Mr Koushik Chatterjee, at a conference call on Friday.

However, much would hinge on the feasibility report expected in the next six months to determine the exact quantum of production and output that could be expected from the operations, he said.

Mr B. Muthuraman, Managing Director, Tata Steel, said the current agreement was a significant step in Tata Steel’s initiatives for raw material security. It gave Tata Steel an opportunity to participate in the development of the region as a coal resource for its global operations and also enhance its long-term competitiveness.

Tata Steel will be contributing technical expertise to the joint venture with Riversdale. A special purpose vehicle will be established for the purpose. The joint venture comprises two licences (the Benga and Tete licences) covering an area of 24,960 hectares. Riversdale Mining holds a total acreage of over 2,90,000 hectares in Mozambique. Tata Steel has the option to participate above the level provided for in the current joint venture agreement, as also in future opportunities in Riversdale surrounding tenements.

Riversdale Mining had recently announced a major coal resource in the Benga Licence. Based on the drilling results undertaken by Riversdale, the total resource is estimated at 1.225 billion tonnes categorised as “inferred resources.” Tata Steel’s stock rose 2.94 per cent on BSE on Friday, closing at Rs 825.70.

Related Stories:
Tata Steel to buy 35% in Australian co Riversdale’s Mozambique Coal Project

More Stories on : Steel | Alliances & Joint Ventures | Coal | Tata Steel Ltd

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