The largest steel producer in India, JSW Steel, is facing difficulties in Mozambique due to a court case that suspended the purchase of the Revuboe (MDR) coal mines in the central province of Tete. The deal, signed with the estate of Australian businessman and investor Ken Talbot, was interrupted after the government revoked MDR’s exploration licence, valued at 50 billion dollars.
According to BNN Bloomberg, the Mozambican government justified the revocation by the lack of progress in operations, but MDR contested the decision, claiming that the delay was due to land disputes and other external issues. Despite this, in August the state published a notice to potentially transfer the concession to Stonecoal SA, a company operating in the mining industry and associated with Jindal Steel & Power Ltd.
The situation has led to a legal battle between MDR and the government, while JSW remains an observer. MDR has initiated legal proceedings in Mozambique and international arbitration in Geneva to overturn the decision and recover its licence. The company claims that the revocation of the contract was illegal and did not follow the correct procedures.
The case comes at a delicate time for Mozambique, which is facing political unrest following disputed elections and violent protests. The instability has also affected industrial operations in the country. Recently, companies such as Syrah Resources and South32 announced ‘force majeure’ in their operations due to disruptions caused by insecurity.
The suspension of MDR’s licence also represents a significant setback for JSW Steel, which had planned to exploit the coal concession with the potential to produce 280 million tonnes of coking coal (mineral coal used in the production of coke, a solid, porous fuel with a high carbon content, essential for the production of iron and steel). This material is essential to the company’s activities as it seeks to reduce its dependence on external suppliers and strengthen its supply chain.
In addition, the involvement of companies such as Stonecoal SA, registered at an address linked to relatives of Mozambique’s outgoing President Filipe Nyusi, raises questions about possible conflicts of interest.
Meanwhile, the conflict continues to affect the confidence of international investors in Mozambique. Strategic projects, such as the liquefied natural gas project led by TotalEnergies, remain suspended, exacerbating the country’s economic difficulties. The arbitration in Geneva, overseen by the International Centre for Settlement of Investment Disputes, represents an attempt by MDR to regain control of the concession and attract stability to the sector.
If the contract is not reinstated, it will be a blow not only to JSW’s plans, but also to the country’s mining sector. The lack of consensus on the outcome of the dispute could further compromise the future of international operations and local production, especially at a time when Mozambique is trying to attract investment and overcome structural challenges.
