ICVL Acquires Mozambique Coking Coal Mine from Rio Tinto for $50mn

NEW DELHI (Scrap Monster): International Coal Ventures PVT LTD has agreed to buy the Benga mine in Mozambique from Rio Tinto. After the completion of acquisition, the group’s coking coal production will raise up to 13 million tonnes per annum in three years, which triple times greater than its present capacity.

Rio Tinto agreed to sell its Benga mine and other mines in Tete province to ICVL for just $50 million. These assets were acquired by Rio Tinto through a$4 billion acquisition of Riversdale Mining in 2011

Last year, Rio Tinto dismissed its chief executives and other executives who directly involved in the Riversdale acquisition and wrote off around $3.5 billion of the purchase price, partially due to the failure to access a permit for transporting coking coal by barge down Mozambique's Zambezi River.

C.S Verma, chairman of ICVL said that they would be able to bring the coking coal profitably in India by using a secret recipe, but he declined to make clear about the secret way for coal transportation. He added that they would have an operational control that would give them coal security in most affordable way.

ICVL will use the infrastructure in Mozambique for optimizing the operations and develop the railways and ports as the part to make the project much better than before. The deal will close within two months. In the Benga mine, 35 pct was owned by Tata Steel India and produces about 5 million tonnes.

It has 2.6 million reserves and about 70 pct was going as steel making coking coal. ICVL is planning to bring 60 pct of coking coal to India, once it achieves the production up to 12-13 million tonnes. The rest of the production will be gone to Tata steel as per the deal. This is the first acquisition done by the ICVL. ICVL is the group consists of SAIL, coal India Ltd, Rashtriya Ispat Nigam Ltd, National Minerals Development Corp and National Thermal Power Corp Ltd.