Riversdale Mining Ltd will see Tata Steel Ltd continue as a major stakeholder. The Indian steel company currently owns a 24% stake in the Australian coal mining company.
The Managing Director of Tata Steel Mr. H. M. Nerurkar spoke to the press on the sidelines of a mining conference when he said that they were sustainable shareholders in the company and would like to remain there.
The Indian steel company needs the coking coal supplies from the mines of Riversdale in Mozambique to facilitate its steel making operations. There was speculation about the firm continuing its interest in Riversdale Mining as Rio Tinto is looking into a takeover of the firm. It has offered the mining company a $3.9 billion deal with a deadline of March 4 this year.
Riversdale Mining Ltd has 13 billion metric tons of coking and thermal coal reserves at two of its projects in Mozambique. These are the Benga and Zambeze coal projects. With the needs for coal growing in India as both steel makers and power companies find their demands growing the companies in India are desperate for coal from any source.
The domestic coal supply has also dwindled recently in view of strict environmental laws creating no go zones for mining in areas that have over 30% forest cover. The complicated process to get a permit in the country and then it getting cancelled for no apparent reason has made companies vary of investing in mines in India and are now looking for sources outside to feed their demand of coal.