ArcelorMittal Invests in Mozambique’s Coal Mining

ArcelorMittal invests in Mozambique’s coal mining

MAPUTO, Nov. 21 (Xinhua) — The world’s largest steel company, ArcelorMittal, on Wednesday announced that it is taking a stake ina coal mining company in the western Mozambican province of Tete, local media AIM reported.

ArcelorMittal is purchasing 35 percent of the equity in the joint venture Rio Minjova Mining and Exploration Company for 2.5 million U.S. dollars, the state news agency said.

Its partner is the Mozambique-registered company Black Gold Mining (Moc) Lda, which is transferring its mining licences to thejoint venture. Those licences cover an area of 49,360 hectares in Tete.

ArcelorMittal has an option to pay a further 2.5 million dollars, and thus become the majority shareholder in Rio Minjova. It will make this payment if the existence of coking coal reservesis confirmed.

That seems highly probable, since this part of Tete sits on a huge coal basin. The Rio Minjova area is close to the area where the Brazilian mining giant, the Companhia Vale do Rio Doce (CVRD),plans to mine coal.

On Tuesday, ArcelorMittal signed a memorandum of cooperation with the Mozambican government to develop both the steel industry and the mining sector.

According to the company, the memorandum envisages further investment in the primary and downstream steel industries, as wellas mining of raw materials in the form of iron ore and coal with specific focus on metallurgical coal.

Mozambique’s National Director of Industry Sergio Macamo said “ArcelorMittal has established a reputable record as a responsible investor in various business ventures all over the world. They arerightly seen as a model for the responsible development of the steel industry globally, and we are pleased to give our full support to their development plans and investment in Mozambique.”

ArcelorMittal’s first venture into Mozambique was in October 2006 when Mittal Steel South Africa agreed to purchase the assets of two ruined Maputo engineering companies, the steel rolling millCSM, and the wire-drawing company Trefil. Mittal pledged to invest10 million dollars to make the factories operational again.

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