Coal India aims on one more block in Mozambique

Kolkata: Coal India is eyeing one more block in Mozambique, this time through International Coal Ventures Ltd (ICVL).

The coal major was recently awarded two exploratory blocks by the Mozambique government.

ICVL is a special purpose vehicle created by CIL, SAIL, Vizag Steel, NTPC and NMDC to scout for coal assets abroad. CIL and SAIL hold majority stake of 28 per cent each in the SPV.

CIL being the lone producer plays the lead role in assessing the acquisition opportunities on behalf of the consortium partners.

While details of the target block are not known, sources said that SPV might finally be close to acquiring an exploratory asset in the African country.

Mozambique has one of the largest reserves of thermal as well as coking coal in the world and has recently offered block A1 and A2 to CIL as part of a concession agreement.

Of the two blocks, A1 is most promising and has an estimated reserve of one billion tonne thermal and coking coal reserve.

CIL is expected to invest Rs 700-800 crore in developing the assets in next five years.
According to early estimates, the mines have a production capacity of five million tonnes a year in the first phase and will be developed in joint venture with either the Mozambique government or its nominee.

The local partner will hold a minority stake of 10-15 per cent. CIL can export 85 per cent of the produce to India.

As part of the concession agreement, the company will spend an additional Rs 100 crore towards distributing artificial limbs in the civil war ravaged country, creating a mine technology hub and setting up an institute on the lines of the Indian Institute of Mines to create sufficient human resource pool in that country.