Rio Tinto forms joint venture with Mozambique firm to explore coal
Under the deal, Rio Tinto will hold 75% equity in the joint venture firm, Minas de Changara, while EMEM will own the remaining stake.
EMEM is owned by the Mozambique government and is involved in geological mining, the provision of advisory, consulting and technical assistance, prospecting and research for natural resources and the development of partnerships with other national and foreign companies.
Minas de Changara will begin operations with a portfolio of three coal prospecting and research licenses, which will be transferred by Rio Tinto, reports Bloomberg.
Rio's local director Eric Finlayson said in a statment, "We want to develop a global competitive coal industry to contribute to Mozambique's prosperity."
The initial prospecting and research work will be funded by Rio, and later, the two companies will fund the development of the project if the prospecting work shows feasibility.
Rio Tinto re-launched its coal mining operations in the Tete province earlier this month following assurances from the government and a review of the technical safety conditions of the Sena railway line by an independent body.
In February 2013, Rio had declared 'force majeure' to justify the halting of operations at its Benga mine.
This step was taken in order to prevent the accumulation of coal, which the company could not transport to Beira port as the Sena railway line was closed due to heavy rainfall.
Image: Rio Tinto and Empresa Mocambicana de Exploracao Mineira will explore coal in Mozambique's Tete province. Photo: Dan/Freedigitalphotos.net.