ICVL has made its first overseas deal with acquisition of Rio Tinto Coal assets in Mozambique.
International Coal Ventures Private Limited (ICVL), which was formed with an objective to secure the supply of metallurgical and thermal Coal for India, was looking for Coal mines assets since its foundation in 2009.
On 28 Jul, 2014 an agreement was signed by Ajay Mathur, CEO of ICVL and George Hartley, Director in charge of M&A in Rio Tinto. The agreement includes assets in Benga Coal mine and other projects in Tete province. The mines have got reserves of 2.6 BnT that comprises 70% Coking Coal reserves.
As per data available with SteelMint, India mainly fulfilled its domestic requirement by importing Coking Coal from Australia. It has imported around 0.60 MnT from Mozambique from Jan-Jun’14.
Monthly Coking Coal Import
|
Month |
Jan’14 |
Feb’14 |
Mar’14 |
Apr’14 |
May’14 |
Jun’14 |
|
Mozambique |
0.05 |
0.03 |
0.06 |
0.18 |
0.20 |
0.07 |
|
Australia |
2.54 |
2.29 |
3.37 |
2.67 |
2.79 |
3.07 |
|
Others |
0.62 |
0.29 |
0.73 |
0.51 |
1.00 |
3.50 |
|
Total Import |
3.21 |
2.61 |
4.16 |
3.36 |
3.99 |
3.50 |
Qty in MnT
“The asset is going to be useful for our domestic steel industry and it is a right step with expansion plans of steel sector,” said Narendra Singh Tomar, Union Steel & Mines Minister.
However, some of the industry experts stated that India is a logical market for Mozambique because of its proximity and the Coal quality, which is appropriate to run Indian plants.
India is trying to diversify its sourcing of Coal through acquisition of different overseas assets. Current acquisition may enable India to reduce both supply risks and manage price volatility.
As per some market participants, asset acquisitions in Mozambique may give India a logistical advantage as well. This joint venture for overseas Coal assets will help CIL to fulfill the growing demand in the country.
CIL already owns a mining company in Mozambique named as ‘Coal India Africana Limitada’.
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