India’s state-owned International Coal Ventures (ICVL) has unveiled plans to invest $500m in its recently purchased coal mines in Mozambique.
According to a senior ICVL official, the company intends to support logistics and infrastructure projects at the Mozambique mines over the next two to three years, according to PTI.
In July this year, Rio Tinto sold its coal assets in Mozambique to Indian state-owned consortium International Coal Ventures (ICVL) for $50m.
The sale included Rio Tinto Coal Mozambique’s Benga mine, Zambeze project and Tete East project in the Tete province.
An ICVL official told PTI: "At this point of time, the mining operations are making cash losses.
"There are about one billion tonnes of reserves available…It is a very good strategic investment."
Benga mine currently produces five million tonnes of coal but is suffering from significant logistics issues.
Of the total production, about two million tonnes of washed coal is being produced for use by Tata, which has 35% stake in the venture.
ICVL was created by the Indian Government as a joint venture company for acquiring metallurgical coal and thermal coal assets outside the country.
Although there have been proposals to introduce a third partner to the joint venture, the company is not looking for a partner.
"It needs about Rs3,000 crore ($490m)," the official added.
"All the PSUs can put together and invest over a period of time. I don’t see any necessity for an outsider to join us."
Image: Benga mine currently produces five million tonnes of coal but faces severe logistics issues. Photo: courtesy of Rio Tinto.