India: ICVL planning Coal Asset Acquisition in Mozambique

ICVL is currently evaluating Coal assets in Mozambique for acquisition and also examining Coal blocks of other countries.

International Coal Ventures Private Limited (ICVL), which was formed with an objective to secure the supply of metallurgical Coal and thermal Coal, is looking for opportunities in Mozambique’s Coal assets.

Mozambique, which is one of the potential assets for Coal has drawn attention from many reputed miners across the globe. Coal production is anticipated to reach around 41.8 MnT in FY17. Companies like Rio Tinto and Vale had invested in some of the best quality Coalfields in Mozambique. However, some of the industry experts believe that poor infrastructure may be a concern for ICVL.

CIL has failed to meet the domestic requirement from last couple of months. This joint venture for overseas Coal assets may helps CIL to fulfill the growing demand in the country. CIL already owns a mining company in Mozambique named as ‘Coal India Africana Limitada’.

As per data available with SteelMint, India mainly fulfilled its domestic requirements by importing Coking Coal from Australia. It has imported around 0.52 MnT from Mozambique till May’14.

India is trying to diversify its sourcing of Coal through acquisition of different overseas assets. It will 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.

The domestic Coal demand is estimated to reach around 980.5 MnT (67.2 MnT Coking Coal) by FY17, which would be around 26.8% higher than the total Coal required in FY13. In order to meet this burgeoning demand, India’s state owned companies are strengthening their supply source.

It is to be noted that NTPC has decided to leave the conglomerate as of now as it had plans to buy thermal Coal, while other members were keen on Coking Coal.