Millennium Post

ICVL to invest $500 mn in its Mozambique coal mines

State-owned International Coal Ventures (ICVL) will invest $500 million to create logistic and other infrastructure support in the next 2-3 years at its recently acquired coal mines in Mozambique, a senior official of the PSU said. ICVL is also looking to appoint a full-time official with rich experience in coal mining to head the operation of the Mozambique mines to turn them into a profitable venture, he said.

ICVL signed the pact on 28 July 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.

Currently Benga, the only operational mine, produces about 5 million tonnes per annum and is making cash losses. The mines need creation of about 500 km railway line and port, he said.

'There are logistic issues. At this point of time it (mining operations) is making cash losses. There are about one billion tonnes of coal reserves available. It needs another $ 500 millions in the next two to three years. It is a very good strategic investment,' the official said, adding that the immediate goal is to ramp up the production to 12 million tonnes per annum. As of now, five million tons of coal is yielding two million tonnes of washed coal which is being taken by Tatas, a partner in Benga with 35 per cent stake, he said.
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