Indian state-owned consortium International Coal Ventures (ICVL) is reportedly buying Rio Tinto's assets in Mozambique for $108m.
The companies are in talks over the sale of the Zambeze project, Tete East project and the Benga mine, which would enable ICVL to provide captive coal mines for its investors.
ICVL is a special purpose vehicle founded by the Indian Government with the intention of acquiring mining assets abroad to supply at least five million tonnes a year of coal from these resources.
The joint venture of Steel Authority of India and Coal India aims to own 500Mt of coal reserves by 2019 to 2020.
Rio Tinto acquired the three mines in 2011 through the purchase of Riversdale Mining. The mines have produced 733,000t of coking and thermal coal in the first half of the year.
The Zambeze and Tete East projects are 100%-owned by Rio Tinto while the company has a 65% interest in the Benga mine.
An unidentified Indian Government official involved with the negotiations told the Wall Street Journal: "We expect the deal to be signed over the next three to four days."
Earlier this month, ICVL said that it was submitting a $200m bid to acquire Rio Tinto's coal assets in Mozambique.
A source in the steel ministry previously told PTI: "ICVL had preliminary talks recently with some Rio Tinto officials in Mozambique and it is likely to submit a binding bid within a couple of weeks intending to fork-out $200m for buying its stake in all three projects."
Image: The three mines in Mozambique have produced 733,000t of coking and thermal coal in the first half of the year. Photo: courtesy of Rio Tinto.