Tata Steel Global Minerals Holdings Pte Ltd, an indirect wholly owned subsidiary of Tata Steel Ltd, on Thursday acquired additional shares of Riversdale Mining Ltd (RML), Australia, through market purchases, taking the holding to 19.38 per cent, according to a press release issued by Tata Steel.
RML is a mining company listed on the Australian Stock Exchange (ASX) and its stock shot up 2.2 per cent on ASX on Thursday.
RML told ASX on Tuesday that it has completed feasibility study for the Benga coal project in Mozambique, which is being developed as a joint venture in which Tata Steel holds 35 per cent stake. It also indicated that Tata Steel would review the feasibility study to firm up the development decision. RML said it would start coal exports from the Benga project in the second quarter of 2011.
The feasibility study contemplated three principal stages of development to align with the completion and subsequent expansion of rail, port, and river barging infrastructure in Mozambique. The stage-one development, at a cost of $260 million, would produce about 1.7 million tones per annum (mtpa) of high-quality hard coking coal, and 0.3 mtpa of export thermal coal. The stage-one mine production and coal preparation plant start-up is planned for early 2011, with export of coal from the Port of Beira expected to start upon commissioning of the third-party operated railway, and the refurbishment of the coal export facility at Beira, currently anticipated for the second quarter of 2011.
RML said that the phase-two expansion would include the installation of a second module of the coal preparation plant, boosting output to 3.3 mtpa hard coking coal, and 2 mtpa export thermal coal.
The stage-two production, which would cost $150 million, would start no later than 2014, and would be timed to coincide with the opening of a new purpose built multi-user coal terminal, at the Port of Beira, as well as the start of barging operations.
The final stage was anticipated to increase coal production to about 20 million run-of-mine tonnes a year, through the installation of two additional coal preparation plant modules.
The feasibility study was based on coal reserves and coal resources estimates, released by RML in April. The company’s earlier coal resource update had supported the development of the open-cut coal project. It suggested that 1.76 billion tonnes of deposits would be available under 500-metre depth, and suitable for open-cut mining.
The updated resources and reserves statement gives an estimated coal resources totalling 4 billion tonnes, comprising measured resources of 313.9 million tones, indicated resources of 720 million tones and inferred resources of 2,990 million tones.
In a signed statement, Mr Steve Mallyon, MD of RML said that the company was “adequately funded for its 65 per cent share of the stage one development ($ 169 million) with cash reserves of A$ 295 million and minimal debt.”
Source: The Hindu Businessline