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THE board of Indian state-owned mining company Coal India
will decide in Kolkata tomorrow whether to go ahead with a controversial
possible joint mining venture with the Limpopo provincial government.
If the board agrees, the deal will be signed by March this
year and will see Coal India taking a majority stake, while the Limpopo
government retains 26% of the company which will mine coal in the province.
Coal India, which has since postponed a fact-finding mission
which was due to happen this month, said last week it had $817m (about R6.35bn)
that it has to spend by March this year, and the Limpopo government was hoping
to receive a cut of the state-owned entity’s massive war chest.
This was despite the Limpopo government recently being placed under administration by national government.
Coal India was also interested in a coal deal with
Mozambique, but scrapped their tender a week ago to pursue “other global
opportunities”.
Limpopo’s own state-owned mining company Corridor Mineral
Resources (CMR) – a wholly owned subsidiary of Limpopo Economic Development
Enterprise – entered into a joint venture with Coal India to develop new coal
mines in the province last year. The other government partner is Trade and
Investment Limpopo (TIL).
The Indian company produces 80% of India’s coal and is under
pressure to deliver coal to feed 20 new coal-fired power stations being built
in India.
Five Limpopo departments were recently placed under national
government administration and the fiscus is unable to pay its service
providers.
The Indian mining deal was put together over the past two
years with Premier Cassel Mathale leading the charge, holding several
high-level talks in India.
Mathale’s spokesperson, Mashadi Mathosa, told City Press it
was the Indians who approached the premier first with a proposal to do business with the provincial
government.
“The premier then advised Coal India to meet with TIL and
CMR to start talks on the subject,” Mathosa said.
She confirmed Coal India’s trip had been postponed and no
date for another visit given.
The memorandum of understanding between the parties was
signed in September last year. “The parties have agreed to work hand-in-hand on
identification towards the exploration of coal resources in Limpopo province,”
she said.
India has expressed an interest in partnering with Limpopo
in scientific development and exploration of coal resources in order to export
coal to meet the current and growing demand for coal in India.
“The memorandum of understanding indicates that the parties
are working towards a productive partnership that will benefit both the Limpopo
province and the people of India,” she said.
The Limpopo government holds no coal prospecting rights and
would have to buy out other rights holders, Trade and Investment Limpopo chief
executive Motalane Monakedi has said previously. Monakedi has further said that
they were negotiating with at least one rights holder.
Coal mining in large parts of Limpopo, including the
Soutpansberg, is problematic due to the lack of water.
- City Press
