Indian steelmaker Tata Steel Ltd and Australian miner Riversdale Mining Ltd have signed a joint venture agreement for the development of a hard coking and thermal coal project at key coal exploration tenements held by Riversdale in Mozambique.
According to the agreement, Tata will pay AU$100 million (approximately US$88.2 million) to acquire a 35 percent project interest. For this consideration, Tata will secure a key position in the JV formed to develop the Mozambique Coal Project, as well as a 40 percent share of the off-take for coking coal.
The JV in question comprises two licenses, namely the Benga and Tete licenses, and covers an area of 24,960 hectares. Riversdale Mining holds a total acreage of over 290,000 hectares in Mozambique.
The coking coal derived from this project will be supplied to Tata Steel Group's facilities in Europe, Asia, and elsewhere.
Commenting on the joint venture agreement, Riversdale chairman and CEO Michael O'Keeffe said, "The global steel business of Tata has an increasing need to source coal, and the Mozambique Coal Project is well positioned to help meet their future demands for hard coking coal."