Essar Port to pump Rs 3000cr to develop port at Mozambique

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Essar Port to pump Rs 3000cr to develop port at Mozambique

The Essar Group wants greater mobility for the products from its mining and steel operations in Africa, so Essar Ports has finalised a plan to develop a port in Mozambique, reports CNBC-TV18's Archana Shukla.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show » ALSO READ See latest News about Essar Ports See previous management interviews See what other Experts & Brokerages are saying about Essar Ports

The Essar Group wants greater mobility for the products from its mining and steel operations in Africa, so Essar Ports has finalised a plan to develop a port in Mozambique, reports CNBC-TV18's Archana Shukla.

Essar Ports is readying for Rs 3,000 crore investment in Mozambique, Africa for its first overseas port project. The port will initially boast facilities that can handle 30-40 million tonne of coal and iron ore per annum and will eventually expand into a multi-purpose port.

In addition, Essar Ports will build a slurry pipeline to connect the Mozambique port to Zimbabwe. The aim is easier movement of iron ore and pellets to support the raw material required at the Essar Group's recently acquired Zimbabwe Iron and Steel Company.

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Essar port says its talks with the Mozambique government are progressing rapidly. Rajiv Agarwal, managing director and chief executive officer, Essar Ports said, "We are in talks with the Mozambique government and hopefully will reach a definitive position in the next six months. We are very keen to set up the port."

Essar Ports has already spent two-thirds of its planned Rs 9,300 crore investment warchest on expansion programs in India. So, it will look at fresh funding options to fuel its Africa operations.

Essar Ports says, the Mozambique project will not cater to just the Essar Group's needs, it is looking to handle the needs of other companies that have invested in the region and want to export iron ore and coal from there.

This will also mean that Essar Ports reduces revenue-dependency on group companies from the current 98%. But analysts warn that going by past precedent, the company may face quite a few execution challenges.

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