Tata Steel spends big on Riversdale

INDIA’S Tata Steel has upped its stake in fellow Benga joint venture partner Riversdale Mining after the completion of the feasibility study for the surface coal mine in Mozambique.

Blair Price

The steelmaker purchased an extra 8.49 million shares in Riversdale on Tuesday, the day of the feasibility announcement, and now holds 36.74 million shares in the company, increasing its stake from 14.99% to 19.38%.

At an average trading price of about $A6 on the day, Tata would have paid around $50 million.

The $US800 million-plus Benga coal project is initially targeting production of 5.3 million tonnes per annum of run-of-mine coal in early 2011, resulting in 1.7Mtpa of hard coking coal and 300,000tpa of export-quality thermal coal.

Tata is a 35% stakeholder of the project.

Benga has 181.3Mt of proved coal reserves and 92Mt of probable reserves.

Riversdale shares jumped A14c in trading yesterday, closing at $6.45. Two weeks ago, its shares closed at $5.01.