Said Michael O’Keeffe, CEO and chairman of Riversdale, “The MoU with Tata Steel is a decisive corporate event for Riversdale and is 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.”

The completion of the transactions contemplated by the MoU is subject to completion of due diligence, definitive agreements, and Board approval of both companies and regulatory approvals.

Riversdale Mining Ltd incorporated in 1986 is engaged in mining activities and is listed on the Australian Stock Exchange. The company owns a 74 per cent share of two anthracite projects in South Africa. In October 2006 the company acquired Africoal Mozambique Ltd through its 100 per cent subsidiary Riversdale Energy Mauritius Limited, and thereby the ownership of large coal tenements in Mozambique in the Zambezi basin. The company is currently exploring the Benga tenement.

After the takeover of Corus in the UK for over $12 billion earlier this year, this is the next big acquisition of Tata Steel — the sixth largest steel maker in the world. The Tatas are in the final stages of tying up funds for Corus. Another group company, Tata Power, had struck a deal to buy 30 per cent stake in two coal mines in Indonesia for $ 1.1 billion earlier this year. Tata Motors is also in the race to acquire Jaguar and Land Rover from Ford Motor of the US. Tata Steel shares ended 2 per cent up at Rs 652.35 in a firm Mumbai market that closed 1 per cent higher.