Tata Steel and Riversdale Mining, Australia, are likely to invest $270 million (approx Rs 1,268.46 crore) for the initial Stage I development of the Benga Coal project in Tete province of Mozambique.

Stage I development is to be funded by Tata Steel and Riversdale in their respective proportions (35:65) from existing cash resources or any other alternative means. Tata Steel owns 19.38 per cent stake in Riversdale through its subsidiary Tata Steel Global Minerals Holdings Pte Ltd.

Currently, Riversdale has Australian $268 million cash to fund its share ($175 million i.e approx Rs 822.15 crore) of the project. Construction is expected to begin by December 2009. However, the partners are awaiting the final environmental approvals.

Stage I development envisages an initial production of 5.3 million ROM (recycled organic material) tpa to produce about 1.7 million tpa of high quality hard coking coal and 0.3 million tpa of export thermal coal.

Stage II expansion which to be taken up by 2014, comprise the installation of a second module of the coal preparation plant and increase ROM production to 10.6 million ROM tpa to produce 3.3 million tpa high quality coking coal and two million tpa export thermal coal.

Stage III is likely to increase the coal production to about 20 million ROM tpa trough installation of two additional coal preparation plant modules.

The Benga Coal Project is likely to commence first production during 2010, and the supply of coking coal is expected to begin in 2011.

Also See:

Tata Steel raises stake in Riversdale (17-Jul-09)