CVRD teamed up with North American coal producer American Metals and Coal International, which has a 5% interest in the consortium bid, to pay US$122.8 million for the concession, considered the largest unexplored coal province in the world with an estimated 2.4 billion tonnes of coking and thermal coal.
The Brazilian steel industry would be a natural market for absorbing the supply of coking coal, while excess demand for energy offered good opportunities for thermal coal, according to the company.
This year CVRD entered into two partnerships with Chinese companies Yangkuang, Yongcheng and Baosteel, in the capacity of a minority shareholder, for the development of coal related business in China.
CVRD has already concluded a pre-feasibility study for the Mozambican project and a full feasibility study is scheduled to start in January 2005 and take an estimated 24 months to complete.
The total projected investment figure of US$1 billion includes the concession payment, mine development, the construction of a maritime terminal for ship loading and social investments.
