Having bagged the mining rights of 2.6 billion tonne of coal in Mozambique, state-run steel and mining companies will spend nearly about Rs 12,500 crore to set up a power plant and a coal-to-liquid project besides exploiting 13 million tonne of the fuel within three years.
The International Coal Ventures Limited (ICVL) was formed as a SPV by public sector steel makers SAIL and Rashtriya Ispat Nigam Limited, the country’s biggest iron ore miner NMDC Limited and Coal India in 2009 and has an authorised capital of Rs 10,000 crore and enjoys powers and autonomy of a Navratna company. The SPV in July last year had signed a pact with global mining firm Rio Tinto to acquire 65 per cent stake in its Benga coal mine and 100 per cent stake in Zambeze and Tete East mines in Mozambique. The PSUs are banking heavily on the prime coking coal being produced from Benga to fire their furnaces.
ICVL has already sent three shiploads of coal from Benga for SAIL and RINL’s blast furnaces and five more shipments are expected this year. To achieve economies of scale locally, ICVL has decided to set up a coal-to-liquid (CTL) project, a 300 MW thermal power plant there and ramp up the output from Benga to 13 million tonne by 2017. The expenditure of setting up these two greenfield utilities and ramping up the coal output would by $ 1,900 million (Rs 12,500 crore), director general of ICVL Mozambique Nirmal Chandra Jha told The Indian Express.
Jha said the SPV has on January 12 invited EoI (Expression of Interest) for the CTL project and power plant, which has evoked encouraging response from various companies. According to ICVL’s estimates the CTL project would require investment of around Rs 2,200 crore, Rs 5,000 crore for the thermal power plant and Rs 4,800 crore for ramping up output from Benga to 13 MT from 5 MT currently. Arguing that coking coal crisis for the state-run steel firms would be soon over, Jha said, the quantity of coal in Mozambique is bound to feed the furnaces of their plants at least for the next 35 years.
Paucity in coking coal availability locally compels domestic steel companies to import it annually in huge quantity every year. More so at a time when both SAIL and RINL are in the midst of major capacity expansion exercise.