Indian steel tycoon's pathway to $74 million Mozambique coal deal reopens

India’s largest steelmaker can proceed with the acquisition of a coal deposit in Mozambique after the seller recovered the concession rights from the country’s new government.

JSW Steel Ltd.’s $74 million deal to buy Minas de Revuboe — announced a year ago — ran into trouble when the administration of then-President Filipe Jacinto Nyusi revoked the local company’s mining lease. MdR responded by initiating legal and arbitration proceedings to regain the license.

The concession was restored to MdR – owned by the estate of Ken Talbot, an Australian mining tycoon who died 14 years ago – last week, according to Mozambique’s database of natural resources permits. President Daniel Chapo’s cabinet had already reversed the cancellation of MdR’s mining contract with the government on April 15.

“We are pleased with the outcome and express our gratitude to the government for its leading role in facilitating this,” a spokesperson for the Talbot estate said. “We are now focused on preparing the project for development and progressing the sale to JSW Steel.”

A spokesperson for JSW – which is headed by the billionaire Sajjan Jindal – declined to comment.

JSW extended its deadline for closing the deal by five months in late January, two weeks after Chapo replaced Nyusi as head of state in the southern African nation.

The company is expanding its network of mining assets, both in India and overseas, to produce more of the iron ore and coking coal it requires to manufacture steel. The firm said in a February presentation that it was still working to acquire the pre-development stage project from MdR, which would give it access to as much as 280 million tons of premium coking coal.

A spokesperson for Mozambique’s Ministry of Mineral Resources and Energy didn’t answer a call, nor respond to questions about why the concession was returned to MdR.

Last August, two months after the license was withdrawn from MdR, Nyusi’s government published a notice in a state-owned newspaper offering a 30-day window for any objections to the concession area being granted to a new company called Stonecoal SA. Four of Stonecoal’s five directors were employed at Jindal Steel & Power Ltd., another Indian steelmaker led by Naveen Jindal, Sajjan’s younger brother.

One of Stonecoal’s directors told Bloomberg in December that they intended to develop the project in their personal capacities.

Naveen also chairs a private business called Vulcan International that owns Mozambique’s largest coal mine at Moatize, which lies adjacent to MdR’s license.

Representatives of Stonecoal and JSPL didn’t respond to requests for comment.

Both JSW and JSPL are part of the late OP Jindal’s Mumbai-based empire, which was divided among his four sons and is overseen by his widow Savitri, India’s richest woman. The brothers occasionally have small cross-holdings in each others’ companies, but they are run separately and even occasionally compete against each other.