Tata Steel Ltd may pick up a 35% stake in its newly formed Mozambique joint venture for a consideration of Australian $100 million, subject to regulatory approvals.
The stake will help Tata Steel get exclusive rights to the coal being mined in the new coal mine and will use it as feedstock for its plants both in India and abroad.
Tata Steel in August had signed a memorandum of understanding (MoU) with Riversdale Mining Ltd (Riversdale) to develop a coal mine in the Tete province of Maozambique. The JV will develop a coal mine spanning 24,960 hectres of land in that country.
The company in a regulatory filing with the Securities and Exchange Board of India (Sebi) last week said, ?In August 2007, TSL and Riversdale Mining Ltd (Riversdale) entered into a memorandum of understanding that may lead to TSL acquiring a 35% stake in Riversdale?s coal project in the Tete province of Mozambique, for a sum of A$100 million. This project includes premium hard coking coal tenements in the Tete province in Mozambique, which are fully owned by Riversdale through its subsidiary,? it said in the filing.
?The tenements together cover an area of 24,960 hectares. The company expects to supply hard coking coal derived from this project to its Corus facilities in Europe and also, possibly, to its Indian facilities. Riversdale is presently conducting a scoping study that is likely to be completed in August 2007. Definitive agreements between TSL and Riversdale are expected to be finalised by November 2007, and the transaction is subject to completion of due diligence, board approval of both companies and various regulatory approvals,? it added.