A joint venture will be established to develop the coal project, which comprises approximately 25,000 hectares across the Benga and Tete licences in the Moatize Coal Basin.

This basin is considered to be one of the largest known undeveloped coking and thermal coal regions in the world.

Tata Steel managing director B Muthuraman said the memorandum of understanding with Riversdale would give the company a stake in a large coal basin which “could prove to be a potential source to meet part of the raw material requirement of the enlarged Tata Steel entity”

Riversdale chairman and CEO Michael O’Keeffe said the MoU was a definitive recognition of the Moatize Coal Basin as a significant new source of supply of hard coking coal products for the global steel industry.

“They [Tata] are an ideal strategic partner for Riversdale, and offer our shareholders the most efficient way to realise value from the development of Riversdale’s world-class projects,” O’Keeffe said.

Riversdale is continuing an intensive exploration program with a view to fast-tracking development of sustainable long-life mining operations.