Essar ports seeks shareholders nod to invest in Beira terminal

Essar Ports has sought the approval of its shareholders to invest up to USD 25 million (about Rs 150 crore) in a company which plans to develop a 10 million tonnes per annum capacity coal terminal at the Beira port in Mozambique.
The investment will be made for developing the terminal as also to provide corporate guarantee or security of up to USD 10 million on behalf of New Coal Terminal Beira, the Essar group firm said in its notice to the shareholders.
Their nod has been sought through postal ballot.
Essar Ports said: "Resolved that pursuant to Section 372 A and other applicable provisions of the Companies Act, 1956...Approval of the company be and is hereby accorded for investment in New Coal Terminal Beira, S.A. (NCTB) either directly/through a subsidiary/an intermediate company for an amount not exceeding USD 25,000,000."

NCTB is a joint venture between Essar Ports (70 per cent stake) and Port and Rail Authority of Mozambique (known as Caminhos de Ferro de Mocambique).
The JV has been specially created to develop a multi-user coal terminal at the Beira Port with an initial capacity of 10 MTPA. The capacity can be increased by a further 10 MTPA in case of availability of cargo.

NCTB has already secured a letter of intent from Ministry of Transport and Communications of Mozambique granting a long- term Concession for the development of this Terminal on DBOOT (Design, Build, Own, Operate and Transfer) basis.

"The initial investment in the Project would be around USD 25 million. The Government of Mozambique requires NCTB to furnish a bank guarantee which is the signing and commencement of works guarantee," Essar said.
The Coal deposits of the Moatize region of Mozambique is calculated to exceed 27.6 billion tonnes, which is 3 per cent of the world's estimated total Coal reserves of 984 billion tonnes.
The size, quality and a high projected recovery rate (95 per cent) of this deposit has attracted mining giants like Rio Tinto and Vale.
Hence, availability of cargo for the terminal will not be a challenge, the company said, adding that the project will enhance the shareholder value and give a boost to third party cargo being handled by it.

The Essar ports scrip closed at Rs 51.50, up 0.29 per cent, on the BSE.