Tata Steel acquires 35% in Riversdale’s coal project

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Tata Steel Ltd on Friday said that the company has entered into an MoU with Australia’s Riversdale Mining Ltd to acquire 35% in Riversdale’s Mozambique coal project for A$100 million.

The hard coking coal derived from this project will be supplied to the Corus facilities in the UK and Europe and also to the company's enhanced requirement in India in the future, Tata Steel said in a media release. Earlier this year, Tata had acquired UK's Corus Plc for $12 billion to become the world's sixth largest steel producer.

The Mozambique coal project includes the coal tenements of premium hard coking coal in Benga and Tete, located in the Tete province in Mozambique, which are fully owned by Riversdale through its subsidiary, the release added.

The Benga and Tete tenements together cover an area of 24,960 hectares. The Riversdale management expects that the potential mineralisation of the area will be substantially high. Riversdale is at present conducting a scoping study, which is likely to be completed in August 2007. The definitive agreements are expected to be finalised and executed by November 30, 2007, the release added. Riversdale Mining is a company listed on the Australian Stock Exchange.

B Muthuraman, managing director, Tata Steel said, “The MoU with Riversdale is in the Tata Steel's stated strategy of progressing towards raw material security for its global business. This partnership gives Tata Steel an opportunity to jointly explore part of a large coal basin which could prove to be a potential source to meet part of the raw material requirement and enhance the long term competitiveness of the global operations.”