Tata Steel has informed us that Riversdale Mining and the company have signed an agreement to establish a special purpose joint venture vehicle to develop a hard coking and thermal coal project at key coal exploration tenements held by Riversdale in Mozambique. Mozambique is fast-becoming a region of global significance for the coal sector.
Under the terms of the agreement, Tata will pay AUD100 million (approximately US $ 88.2 million) to acquire a 35% Project Interest. For this consideration, Tata secures a key position in the joint venture formed to develop the Mozambique coal project, as well as a 40% share of the off-take for coking coal.
Tata will also have the option to participate above this level of tonnage, and may participate with Riversdale in future opportunities on Riversdale’s surrounding tenements. The joint venture comprises two licences and covers an area of 24,960 hectares. Riversdale Mining holds a total acreage of over 290,000 hectares in Mozambique.