ICVL to spend $300m to expand Benga mine in Mozambique

10 August 2014 (Last Updated August 10th, 2014 18:30)

Indian state-owned consortium International Coal Ventures (ICVL) has unveiled a plan to spend $300m on the expansion of coal production at the Benga mine in Mozambique.

Benga_mine

Indian state-owned consortium International Coal Ventures (ICVL) has unveiled a plan to spend $300m on the expansion of coal production at the Benga mine in Mozambique.

Benga mine is one of the Mozambique assets ICVL recently purchased from Rio Tinto for $50bn.

ICVL chairman CS Verma was quoted by The Times of India as saying: "The Benga mine currently produces five million tonnes per annum and our first priority is to ramp this up to 11 to 12 million tonnes in the next three to four years, and to 16 million tonnes over the next four to five years."

The consortium will soon initiate talks with Tata Steel, which has a 35% stake in the Benga mine and the right to take more than 40% of the output achieved from the mines.

"The Benga mine currently produces five million tonnes per annum and our first priority is to ramp this up to 11 to 12 million tonnes in the next three to four years."

Verma told the newspaper: "There are various options that we have and these include contract mining or going in for mining development come operations (MDO) agreement. These details will be sorted out as we move forward."

ICVL will send a team of 25 to 30 workers to start operations in Mozambique and expects the first coal to reach India by December this year.

In addition to Benga mine, the consortium also purchased the Zambeze and Tete East projects, which have coal resources of 1.96 billion tonnes and 260 million tonnes respectively. In the first half of the year, the three mines produced 733,000t of coking and thermal coal.

Verma said: "It may take up to three to four years before we begin work in the other two mines.

"We will adopt a step-by-step approach and our immediate focus will be on Benga."


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.