Mozambique's major coal projects

Monday, November 21, 2011

Mozambique is home to one of the world's largest known untapped coal reserves, with miners from across the globe rushing in to get a share of the pie. Below is a list of the main projects.

VALE :
The Brazilian miner's Moatize mine began production in May this year and is expected to eventually produce 11 million tonnes of coal per year for the next 35 years, including 8.5 million tonnes of hard coking coal and 2.5 million tonnes of thermal coal.

RIO TINTO :
The miner expects its Benga project initially to produce 2 million tonnes of coal, made up of 1.7 million tonnes of coking coal and 0.3 million of thermal coal. Benga is scheduled to rise to around 10 million tonnes of coal by 2013. Its larger Zambeze project will start production in 2015 and will eventually produce 15 million tonnes of coking coal and around 5 million tonnes of thermal coal.

BEACON HILL RESOURCES :
The AIM-listed miner is expanding its Minas Moatize mine to produce 2.35 million tonnes of saleable coking and thermal coal per year. This will include around 0.92 million tonnes of coking coal. Out of the thermal coal produced at the mine, some 0.88 million tonnes are destined for exports and 0.55 million tonnes will supply the domestic and regional market in Africa, including the sugar, cement and tobacco industries. First exports are expected to happen before the end of this year.

ENRC :
The Kazakh miner holds several exploration licences for areas in the Tete province. The company initiated a feasibility study for one of the assets which is expected to be completed in the first half of 2012.

NCONDEZI COAL :
The AIM-listed coal exploration and development company holds 4 licences in the Tete province. The company is due to complete a bankable feasibility study on the project in the second half of 2012. The aim is to construct an open pit mine, which will initially produce 2.6 million tonnes of export thermal coal a year, ramping up to 10 million tonnes. Production start is expected in late 2014 or 2015. The potential to produce coking coal at the site has also been identified.

TALBOT GROUP/NIPPON STEEL /POSCO :
Australia's Talbot Group, Japan's Nippon Steel and South Korea's Posco own the greenfield Revuboe River Mine project, meant to produce both coking and thermal coal, with first output expected from 2013 or 2014. The project is expected to produce 5 million tonnes of coking coal and up to 3 million tonnes of thermal coal per year when it reaches peak production.

COAL INDIA :
The state-owned company and the world's biggest coal producer secured exploration rights at two blocks in Mozambique's Moatize region and hopes to start mining coal at the site within five years. The miner plans to export 10 million tonnes of coal from the two blocks to India in the next 10 years. The blocks are estimated to hold reserves of a billion tonnes of coking and thermal coal. It will invest $400 million in the project.

MOZAMBI COAL :
The company has three mineral exploration projects in the Zambeze coal basin in the Tete province.

JINDAL STEEL & POWER :
The Indian firm holds a 25-year licence to explore and mine for coal in the Tete province. -

Sourced Reuters

Rio Tinto extends $3.9 bln bid for Riversdale by 3 days

Mar 20, 2011 11:05pm GMT

MELBOURNE, March 21 (Reuters) - Global miner Rio Tinto has extended its sweetened $3.9 billion bid for Mozambique-focused coal miner Riversdale Mining by three days.

Riversdale shareholders will receive A$16.50 a share if Rio Tinto gets more than 50 percent acceptances by March 28, Rio Tinto said on Monday.

As of Monday morning, Rio Tinto had received acceptances on 34.94 percent of Riversdale shares.

The offer will revert to A$16 a share if it does not reach the 50 percent mark by then, and will remain open for three extra days until April 6. (Reuters)

Rio Tinto ups holding in $3.9 billion takeover target Riversdale

Thu Mar 17, 2011 11:19pm GMT

SYDNEY, March 18 (Reuters) - Rio Tinto has received acceptances for 33.04 percent of shares in its $3.9 billion takeover target Riversdale , the global miner said on Friday, after raising its offer for the Mozambique-focused coal miner last week.

The offer is conditional on Rio Tinto reaching 50.1 percent control by March 23.
(Created by Ed Davies, Reuters)

Rio Tinto sweetens Riversdale bid to break stalemate

Thu Mar 10, 2011 1:18am GMT
* Offer raised to A$16.50 per share from A$16
* Rio maintains 50% acceptance limit for bid to go ahead
* Riversdale shares fall, 9 percent below offer value
* Rio says offer is final if no competing bids

MELBOURNE, March 10 (Reuters) - Global miner Rio Tinto raised its offer for Mozambique-focused coal miner Riversdale Mining to $3.9 billion in a final bid to woo key shareholders who have held up the deal and gain control of coveted coal assets.

Investors doubted the move would be enough to secure the 50.1 percent acceptances Rio wants and sent Riversdale's shares down as much as 2.4 percent.

"The market's clearly a bit skeptical that it will get across the line," said Peter Chilton, an analyst at Constellation Capital Management, which owns shares in Rio Tinto.

Rio Tinto raised its offer price by 3 percent to A$16.50 per share on Thursday and extended the offer period for the third time, to April 1, but said the new offer was its final one if there were no competing offers.

Standing in Rio's way are India's Tata Steel , the world's No. 7 steelmaker, and top Brazilian steel producer CSN , who have increased their stakes in Riversdale since the bid and now hold a combined 47 percent.

Without their support, Rio would need nearly 100 percent acceptances from the rest of Riversdale's shareholders to get majority control.

"It's going to be quite hard," Chilton said.

As of March 4, Rio Tinto only had acceptances on 17.9 percent of Riversdale's shares.

Tata Steel and CSN have both said they are mainly interested in securing coking coal from Riversdale. Tata, which already has a stake in Riversdale's Benga coking coal project in Mozambique, has said it was talking to Rio about a range of options.

CSN has not publicly revealed its intention over the Riversdale stake or about its possible talks with Rio Tinto.

Analysts said the two companies would probably like to see Rio Tinto, with deeper pockets and more technological skills than Riversdale, developing Riversdale's Mozambique mines and infrastructure.

"There is no question that Rio Tinto's expertise is crucial to overcoming the development challenges of Riversdale's projects," Rio Tinto Energy chief executive Doug Ritchie said in a statement.

If Rio did not take over Riversdale, shareholders would be likely to face big equity raisings by Riversdale to help fund the development of its coking coal projects.

"It's difficult to see that Tata Steel and the Brazilians really want to be involved in what would be very expensive coal development projects," Chilton said.

Complicating talks is China's third-largest steel maker, Wuhan Iron and Steel Corp , which had an agreement to buy a 40 percent stake in Riversdale's Zambeze coal project in Mozambique, with rights to coal supply from Zambeze and Riversdale's other key project, Benga.

Riversdale's shares last traded down 0.5 percent at A$15.05, about 9 percent below the offer price, after touching a low of A$14.77. Rio's shares fell 1.5 percent in a broader market that was down 0.8 percent. (Reporting by Sonali Paul and Balazs Koranyi; Editing by Ed Davies and Dhara Ranasinghe)

Tata Steel's raw material costs to go up to USD 7 bn in FY'11

10 Mar,2011, 02.22PM IST,PTI
NEW DELHI: Tata Steel Group today said its expenses on key raw materials are likely to go up by USD 1 billion in the current fiscal to USD 7 billion due to a rise in input costs.

"We expect a USD 1 billion rise on raw material expenses to USD 7 billion this fiscal on account of floods in Australia and increased activity from China," Tata Steel Group Director (Procurement) Kees Gerretse said on the sidelines of an event here.

The costs on inputs would further escalate by around 15 per cent next fiscal over 2010-11 levels, he added, attributing the rise to higher iron ore and coking coal prices, which went past USD 300 a tonne as a result of a global scarcity in the wake of floods in Australia's Queensland.

Steel prices, as a result, will go up next fiscal as the manufacturers of the alloy are unlikely to absorb the escalated input costs on the back of increased demand for the alloy, he added.

Queensland contributes over 60 per cent of coal exports from Australia, world's largest supplier of coking coal.

As a whole, Tata Steel Group, with a total steel-making capacity of 28.1 million tonnes per annum (mtpa), buys around 17 million tonnes coking coal and up to 27 million tonnes of iron ore a year.

While Tata Steel India has captive iron ore sources, the European operation has none of the key raw materials to feed the plants. Its entire requirement is met through imports. The company had earlier said it would ensure 50 per cent of the key inputs requirement for its European subsidiary by 2015.

Tata Steel has already acquired stake in two coal mines in Mozambique and one in Australia. It has also stakes in an iron ore mine in Ivory Coast and two in Canada.

Gerretse said coal production from Mozambique blocks would peak at 2 mtpa in next two years. Iron ore from the mines in Canada would start coming in from 2014.

The group, he said, was looking at opportunities for acquiring greenfield coal and iron ore assets, but for the time being, its focus would be on the existing mines.

"The price of coking coal will start normalising from August onwards. Iron ore price is also likely to remain stable after the second quarter," he said.

Riversdale says unaware of any competing offers

Thu Mar 10, 2011 6:05am GMT

Sydney, March 10 (Reuters) - Takeover target Riversdale Mining said it was not aware of any competing offers to a sweetened A$3.9 billion bid from global miner Rio Tinto

Earlier, Rio Tinto raised its offer for Africa-focused coal miner Riversdale in a final bid to woo key shareholders, a move that Riversdale said was helping to sway institutions.

(Reporting by Narayanan Somasundaram; Editing by Balazs Koranyi,sourced:Thomson Reuters)

Riversdale CEO sees growing institutional support for Rio Tinto offer

Thursday 10 March 2011, 10:17 AM

MELBOURNE (Reuters) - Institutional shareholders in Riversdale Mining (ASX:RIV.AX) are moving toward backing global miner Rio Tinto's sweetened A$3.9 billion takeover offer for the Mozambique-focused coal miner, Riversdale's chief executive said on Thursday.

Rio Tinto raised its offer to A$16.50 a share on Thursday in a final bid to woo key shareholders who have held up the deal, and extended the offer for a third time, to April 1.

"I can say that from the institutional calls that I've made in the last few hours, that there's some growing support for Rio Tinto," Riversdale Chief Executive Steve Mallyon told Reuters.

(Reporting by Sonali Paul; Editing by Balazs Koranyi,sourced:Thomson Reuters)

Posco says no plan to develop coal mine in Mozambique

Tueday, 01, February 2011
By: Reuters
SEOUL– South Korea's POSCO , the world's No.3 steelmaker, said on Tuesday that it does not plan to develop a coal mine in Mozambique, denying its statement over the weekend for such a plan with Vale .
"We don't have any plan to develop a coal mine in Mozambique with Vale and our earlier statement had factually wrong information," POSCO said in a statement on Tuesday.
POSCO, which aims to double raw material self-sufficiency to 50% by 2014, has earmarked 700-billion won ($627-million) in raw material investment this year.

Last week, POSCO signed a memorandum of understanding with Anchor in Zimbabwe to build a joint mining venture to develop chrome, coal and other raw materials. (sourced:Reuters)

POSCO and Vale join ands to develop coal mine in Mozambique

Sunday, 30 Jan 2011
Reuters reported that POSCO said that it has agreed with Brazilian miner Vale to jointly seek to develop a coal mine in Mozambique.
POSCO said in a statement “The coal mine, located in Tete, Mozambique, would be able to produce 11 million tonnes of coals annually, which will be used as raw materials or for power generation.”

It did not elaborate how much each company would invest.
POSCO, which aims to double raw material self sufficiency to 50% by 2014, has earmarked KWR 700 billion in raw material investment this year.
The agreement comes as a result of POSCO CEO Mr Chung Joon-yang's trip to four African countries last week, aimed at securing resources from the continent.(sourced:Reuters)

Ncondezi Coal seeking Mozambican acquisitions

Monday, 17 Jan 2011
Ncondezi Coal Ltd, seeking to build a coal mine in Mozambique, said that it’s studying acquisitions as interest in the African nation rises following the AUD 3.9 billion bid for Riversdale Mining Ltd last month.
Mr Graham Mascall CEO of Ncondezi Coal said that “Now that we’re established in Mozambique, we have a very good profile with the government, with other industry players, with people interested and we’re getting a lot of in-bound opportunities which we’d like to have a look at. We’re looking predominantly in Mozambique.”
Mr Mascall said that “Mozambique has really grown in its interest for people because of the size of the coal resources I would be surprised if some of the thermal coal buyers in India, some of the steelmakers in China, aren’t looking at us and keeping a watching brief.”
Ncondezi holds four exploration licenses in the Mozambique province of Tete, adjacent to projects owned by Vale, the world’s biggest iron ore exporter and Riversdale. Ncondezi plans to start output from its USD 376 million thermal coal mine as early as 2013 and yesterday sold USD 36.5 million of new shares to buy out a founding holder and study merger and acquisition opportunities.
Rio Tinto Group, the world’s third largest mining company, last month agreed to buy Riversdale to secure reserves of coking coal. Rio’s bid has sparked interest in Mozambique’s mining industry, which has already attracted investment from Brazil’s Vale SA and BHP Billiton Ltd, the world’s two biggest mining companies.
Sourced from Bloomberg