International Coal Ventures Pvt Ltd (ICVL) has acquired Benga, an operating coal mine, and a few other untapped reserves in Mozambique’s Tete province from Rio Tinto for $50 million (₹300 crore). An agreement to this effect was signed by the two sides on July 28, in New Delhi.

The assets include the Benga (65 per cent), Zambeze (100 per cent) and Tete East greenfield coal assets, all of which have substantial reserves of coking coal.

ICVL is a joint venture formed by Steel Authority of India (SAIL), Coal India, Rashtriya Ispat Nigam (RINL), NTPC and NMDC. It was set up in 2009 to acquire coal assets abroad for the Indian steel units.

According to statement by the company, SAIL and RINL are increasing their capacity to 23 million tonnes and 6.3 million tonnes, respectively, and their coking coal requirement will increase to about 25 million tonnes by 2015. On its part, NMDC is setting up a 3 million tonne integrated steel plant.

In a statement to the Australian Stock Exchange, Rio Tinto said it would continue to run the mine. “The sale is subject to certain conditions … and regulatory approvals. The transaction is expected to close in the third quarter of 2014 (by September),” Rio Tinto said.

Coking and thermal coal

The Benga mine produces prime hard coking coal and thermal coal. Rio Tinto had acquired these assets for $3.9 billion in 2011 as part of its acquisition of Riversdale Mining, and later commenced production. However, the global miner faced logistical problems in evacuating the resources.

For ICVL, the resources, however, were viable considering Mozambique’s geographical proximity and given India’s long-term need for raw material security.

The mine is located in the Moatize coal basin, a prime coking coal-bearing region, considered the second largest coal basin in the world after the Bowen basin in Australia

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