Hyderabad, Oct: 26 (PTI): International Coal Ventures (ICVL) will invest $500 million to set up logistics and other infrastructure support over the next 2-3 years at its recently acquired mines in Mozambique, a senior official of the PSU said.
ICVL is also planning to appoint a full-time official with experience in coal mining to head the operations of the Mozambique mines and turn them into a profitable venture, he said.
ICVL signed the pact on July 28 to buy Rio Tinto’s 65 per cent stake in Benga and 100 per cent each in Zambeze and Tete East coal assets in the African nation for $50 million.
Benga is the only operational mine, producing about 5 million tonnes per annum and is making cash losses. The mines need the creation of about 500km railway line and port, he said.
“There are logistics issues. At this point of time, the mining operations are making cash losses. There are about one billion tonnes of reserves available. It needs another $500 million in the next 2-3 years. It is a very good strategic investment,” the official said.
He added that the immediate goal was to ramp up the production to 12 million tonnes per annum.
At present, five million tonnes of coal is yielding two million tonnes of washed coal, which is being taken by the Tatas, a partner in Benga with a 35 per cent stake, he said.
As of now there isn’t any plan to bring in a third partner to create necessary infrastructure to ramp up production, he said.
“It needs about Rs 3,000 crore. All the PSUs can put together and invest over a period of time. I don’t see any necessity for an outsider to join us,” the official said.
ICVL, a joint venture of Steel Authority of India, Coal India, Rashtriya Ispat Nigam, NTPC and NMDC, was created to ensure long-term security of supply of the critical raw material for the steel industry.
On the appointment for the Mozambique operations, the official said, “We are trying to put a core team headed by an expert (in coal mining for Mozambique). The person may not necessarily be from the four PSUs. He could be an outsider also.”
