Nippon Steel wins approval to commence Mozambique coal mine project
Japanese steel producer Nippon Steel & Sumitomo Metal has obtained approval from the Mozambique government to begin work on the country's Revuboe Coal Mine Development Project.
The latest development comes after mining giant Anglo American abandoned its plan to acquire a majority stake in the project for $555m.
Nippon Steel, together with its affiliate Nippon Steel Trading, owns a 33.3% stake in the Mozambique mine project and is looking to commence production in 2016.
Revuboe coking coal mine, which is estimated to have coal reserves of about 1.4 billion tonnes, is expected to produce 5 million tonnes of coking coal a year at its peak, a level that the company aims to achieve by 2019.
Speaking to reporters in Tokyo, a Nippon Steel executive said that although the company was willing to join other mining projects, it had no plans to increase its stake in the Revuboe mine, in which the majority stake is owned by the estate of deceased mining entrepreneur Ken Talbot.
Revuboe Coal Mine Development Project, which is located in Mozambique's Moatize coal basin, has deposits of coking coal on a scale large enough to permit open-cut mining.
The Japanese company believes that with its accelerated efforts toward efficient extraction, the project will cater to its requirements for a long period, while fortifying its stable procurement base in the future, reports Mining Weekly.
Nippon Steel plans to import nearly 1.7 million tonnes of coal from Mozambique - about 6% of its annual coal imports.
Despite holding some of the world's largest untapped coking coal deposits, the mining industry in Mozambique has witnessed a number of challenges in the recent past.
In addition to Anglo American's move to drop the major acquisition plan, Sena railway, which connects the mines in Tete province and the Port of Beira, closed operations in February 2013, disturbing coal shipments.
In early 2013, Rio Tinto also took a $3bn writedown on its investments in Mozambique citing growing concerns over logistics.
Image: Minas de Revuboe's board chairman Denis Wood looks on as Mozambique's Mineral Resources Minister Bias shakes hands with Yasushi Aoki, general manager of Nippon Steel. Photo: Nippon Steel & Sumitomo Metal Corporation.