ICVL to resume operations in Mozambique mine in a few months: SAIL

Work in the mine was suspended in 2015 following a crash in coking coal prices

India's largest steel maker SAIL on Thursday said operations in International Coal Ventures Ltd (ICVL)-- the JV formed by five PSUs -- will resume operations in a few months as prices of coking coal have firmed up.

SAIL Chairman P K Singh told PTI that ICVL had suspended its work in Mozambique mine in December 2015 on the viability ground following a crash in coking coal prices.

ICVL is a joint venture formed by five PSUs -- SAIL, RINL, NMDC, NTPC and Coal India (CIL).

"The prices of metallurgical coal came down to less than $80. The cost of production was more than that. That is why we stopped (the operations). In the next few months, (we would see the operations starting)," he said. "Now, we are going to start the ICVL operations because the prices of coking coal have increased."

ICVL was formed for the acquisition of stake in coal mines or blocks or companies overseas for securing coking and thermal coal supplies.

In view of lack of suitable commercially viable opportunities for thermal coal, NTPC has decided to exit ICVL. Coal India too later said it is not interested in continuing in the JV.

As ICVL was formed by a directive from the central government, approval is awaited for the exit of NTPC and CIL.

In 2014, ICVL signed a pact to buy Rio Tinto's 65 per cent stake in Benga and 100 per cent each in Zambeze and Tete East coal assets in Africa for $50 million.

Benga, the only operational mine, was making cash losses.

"In our operating mine, Benga Tata (Steel) has a share of 35 per cent while the 65 per cent is of ICVL," Singh said.

SAIL has 46.63 per cent stake in ICVL.

Metallurgical or coking coal is a vital ingredient in the steel-making process.

The global coking coal price, which was at $80 per tonne in January last year, rose to $283 per tonne in December 2016, Indian Steel Association Secretary General Sanak Mishra had earlier said.

However, in early January this year, the price of metallurgical coal came down to $193 per tonne, Mishra added.