It is reported that Anglo American PLC is close to a USD 630 million deal to acquire a controlling interest in a large undeveloped steelmaking coal deposit in Mozambique from the Talbot Group.

As per report, London listed Anglo is in late stage talks to acquire the 58.9% stake in the Revuboe River coking coal deposit from the Talbot Group, with parties needing to resolve issues including the award of a mining license by the Mozambique government.

Consolidation in coal mining is intensifying globally, as major miners seek exposure to large deposits that can be developed for export to rapidly industrializing countries in Asia, including China and India in the latest major deal Monday, Whitehaven Coal Limited said it has agreed a nearly AUD 3 billion deal to acquire fellow mid tier Australian coal miner Aston Resources Limited and a smaller coal prospector.

Coking coal is far more scarce than thermal coal, and commands nearly double the price on global markets even though there isn’t much difference between mining costs. High quality coking coal deposits are mostly confined to a few regions of Australia, Colombia, North America, Russia, Mongolia and Mozambique.

Revuboe is a 1.4 billion tonnes coking and thermal coal deposit in the fast growing Tete coal province in central-western Mozambique. The joint venture, which includes Japan’s Nippon Steel Corporation and South Korea's POSCO, hopes to start production of up to 17 million tonnes of coking and thermal coal from September 2013.

The JV partners are likely to give the deal their blessing as they want a miner with the ability to develop the deposit quickly, especially given the logistical constraints in Mozambique such as port and rail access.

A successful deal would mean most of Mozambique's largest coal deposits will now be controlled by mining heavyweights, including Rio Tinto PLC, which acquired Riversdale Mining Limited for nearly AUD 4 billion earlier this year and Brazil's Vale SA.

(Sourced from www.wsj.com)