India has more than one reason to cheer in its ongoing quest for a source of sustainable coking coal. Just as news came that the Australian Government had given the environmental go-ahead to the Adani Group for the $15.5 billion Queensland coal project, came news that a consortium of Indian companies had bagged another major coal sector acquisition.
The International Coal Ventures Pvt. Ltd (ICVL) has taken possession of coking coal and thermal coal mines in Mozambique. Suddenly, for a country that was facing a coal shortage for years, India is now flush in the black mineral; it’s bonanza time!
What’s being dubbed as the icing on the cake is that the Consortium has acquired the prized coal mines for approximately $50 million, where once they had cost Rio close to $3 billion in 2011. The dirt and minerals were literally purchased dirt cheap. Almost like the valuable coal was thrown in for free.
The ICVL is a joint venture of state-run companies with five state-run entities partnering, including the Steel Authority of India (SAIL), the National Thermal Power Corporation and the Rashtriya Ispat Nigam Ltd. The latter depends entirely on coking coal imports to meet its demand, while SAIL currently imports 75 percent of its needs from abroad. Apparently, not much longer, though.
MetalMiner recently reported that the ICVL was actively looking at acquiring Rio Tinto’s Mozambique mining assets, and that’s exactly what happened.
Incidentally, while ICVL had been scouting for coal assets abroad since its inception in 2009, it had failed to clinch every deal it attempted until hitting the Rio Tinto jackpot. With the takeover of the Mozambique mines, the steel majors will not run short of coking coal, a crucial raw material in the making of steel, for the foreseeable future.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.