August 22, 2008

TATA Steel may pick 35% stake in Mozambique coal JV

FE reported that TATA Steel Ltd may pick up a 35% stake in its newly formed Mozambique JV for a consideration of AUD 100 million, subject to regulatory approvals. The stake will help TATA Steel get exclusive rights to the coal being mined in the new coal mine and will use it as feedstock for its plants both in India and abroad.

The report added that TATA Steel had signed a MoU with Riversdale Mining Limited in August 2007 to develop a coal mine in the Tete province of Mozambique. The JV will develop a coal mine spanning 24,960 hectares of land in Mozambique.

TATA Steel in a regulatory filing with SEBI said that “In August 2007, TATA Steel Limited and Riversdale Mining Limited entered into a MoU that may lead to TATA Steel acquiring a 35% stake in Riversdale’s coal project in the Tete province of Mozambique, for a sum of AUD 100 million. This project includes premium hard coking coal tenements in the Tete province in Mozambique, which are fully owned by Riversdale through its subsidiary.”

It added that “The tenements together cover an area of 24,960 hectares. TATA Steel expects to supply hard coking coal derived from this project to its Corus facilities in Europe and also to its Indian facilities. Riversdale is presently conducting a scoping study that is likely to be completed in August 2007. Definitive agreements between TATA Steel and Riversdale are expected to be finalized by November 2007 and the transaction is subject to completion of due diligence, board approval of both companies and various regulatory approvals.”