Tata buys 7.29 pc stake in Riversdale Mining at $120mn

MELBOURNE: India's largest private sector steel producer Tata Steel has bought 7.29 per cent additional stake in Australia-based Riversdale Mining for a sum of $ 120.7 mn, through its Singapore subsidiary.

Tata Steel's Singapore-based subsidiary TS Global Minerals Holdings purchased 13,705,000 shares, representing 7.29 per cent stake in the Australian firm which owns coal blocks in mineral-rich Mozambique.

According to the information available with the Australian Securities Exchange, the arm of Indian steel major has increased its shareholding in the mining company to 42.3 per cent from 35 per cent, since the JV was formed last year.

A Tata Steel spokesperson confirmed the move but declined to reveal any details.

The move by the steel major is aimed to secure thermal coal and coking coal to fuel its steel plants across the globe amidst a tight supply of the raw material.

Tata Steel and Riversdale Mining jointly own coal resources on the Benga tenement located in Mozambique. The total Coal Resource in Benga is estimated to be 2.1 bn tonnes.

In a transaction with Riversdale, last year, the Indian company paid about 100 mn Australian dollar, for two coal tenements in exchange of the right to buy 40 per cent of the coal produced.

In a related move, the investment vehicle of former Macarthur Coal, Talbot Group CEO Ken Talbot reportedly said that it had raised its stake in Riversdale to 13.4 per cent from 11.3 per cent.