JSW Steel Ltd. — run by Sajjan Jindal — agreed in May to buy Minas de Revuboè from the estate of Ken Talbot, an Australian mining tycoon who died 14 years ago. Before the deal could be completed, the Mozambican government revoked MdR’s lease to mine coal valued at about $50 billion.
In August, two months after the license was withdrawn from MdR, the Ministry of Mineral Resources and Energy published a notice in Mozambique’s state-owned newspaper offering a 30-day window for any objections to the concession being awarded to Stonecoal SA. Four of Stonecoal’s five directors are employed at Jindal Steel & Power Ltd., a company headed by Naveen Jindal, Sajjan’s younger brother.
The loss of the rights has triggered a legal battle between MdR and Mozambique’s government, leaving JSW as an observer. It comes at a critical time for the country, after disputed elections last October triggered demonstrations in which at least 278 people have died. That will test Daniel Chapo — due to be inaugurated as president on Jan. 15 — who has prioritized stability for international investors.
Both JSW Steel and JSPL are part of the late OP Jindal’s $35 billion 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.
Sajjan’s JSW first agreed to acquire MdR in November 2023, according to a spokesperson for the Talbot estate, and in May announced a final deal under which it agreed to pay $74 million for a 92% stake. That’s a fraction of the $555 million that 12 years earlier Anglo American Plc said it would pay for a 58.9% stake in the same coal project. The London-based mining giant walked away from the transaction eight months later.
Naveen chairs a private business called Vulcan International that owns Mozambique’s largest coal mine at Moatize, which lies adjacent to the concession stripped from MdR. The younger Jindal brother — now a lawmaker with Indian Prime Minister Narendra Modi’s Bharatiya Janata Party — acquired the asset three years ago in a $270 million deal with Brazil’s Vale SA.
JSPL also owns a smaller coal mine in Mozambique called Chirodzi.
Stonecoal Application
Stonecoal, which applied for the coal-mining rights in August, isn’t part of JSPL or Vulcan and has nothing to do with Naveen Jindal, according to Director Parshant Goyal. Goyal said that he and three other Stonecoal directors employed at Naveen’s JSPL are pursuing the development in a “personal capacity,” only becoming aware that MdR was at risk of losing the concession after the termination took place.
The concession has yet to be granted to Stonecoal, according to Mozambique’s database of mining licenses.
Stonecoal is registered at the same residential address — in an upmarket neighborhood of Maputo — as RockWorld, a group of companies chaired by the eldest son of Mozambique’s outgoing president, Filipe Jacinto Nyusi. Nyusi’s son isn’t a Stonecoal director, according to a company certificate produced by the government.
Goyal, who is the chief executive officer of JSPL’s African operations, declined to answer questions about the identity of Stonecoal’s shareholders.
Stonecoal was set up on Feb. 5, according to Mozambique’s official gazette. That was the day before MdR received an initial revocation notice from the Ministry of Mineral Resources and Energy . While the ministry reversed that decision following a challenge by MdR, it ordered the cancellation of the concession again on June 13.
Mozambique’s Council of Ministers, headed by Nyusi, approved the removal of MdR’s mining contract on July 9, according to a resolution published the following month in the gazette.
The ministry and the office of the presidency didn’t respond to emails and phone calls seeking comment.
Geneva Arbitration
MdR filed a court case in Mozambique seeking to compel the government to restore the lost lease. In September, the company also initiated arbitration proceedings in Geneva against both the Mineral Resources Ministry and the presidency. Stonecoal isn’t part of the legal actions.
Mozambique and MdR exchanged several responses last month in the arbitration, which is being overseen by the International Centre for Settlement of Investment Disputes. The first meeting of the tribunal is expected during the first quarter of this year, according to the spokesperson for Talbot’s estate.
“MdR’s focus is on having the original concession reinstated such that it can complete the sale of the project to JSW,” the spokesperson said in an email. “We consider the termination of the contract is illegal and does not follow due process.”
Including the acquisition of the asset, MdR spent $300 million on the project, according to the Talbot estate spokesperson. The company disputes the ministry’s claim — included in the first revocation notice — that a lack of exploration works justified the permit’s cancellation.
There were, however, land disputes — including with a local mayor — that resulted in a force majeure situation that obstructed progress at the concession, the Talbot estate spokesperson said. While those circumstances were previously acknowledged and accepted by the ministry, they were later “completely disregarded” by the Mozambican government, the spokesperson said.
The legal spat comes at a difficult time for the incoming Mozambique government, as the civil unrest also takes its toll on mining operations. Last month, Melbourne-headquartered Syrah Resources Ltd. declared force majeure for its Balama graphite project, while Perth-based South32 Ltd. withdrew guidance for its aluminum smelter in the country, saying the transport of raw materials had been interrupted.
Mozambique is also waiting for TotalEnergies SE and Exxon Mobil Corp. to decide on whether to revive the development of huge liquefied natural gas projects that have the potential to transform one of Africa’s poorest countries. The French company is leading a $20 billion LNG export project in the northeastern Cabo Delgado province that’s been on hold since 2021 because of nearby attacks by an Islamic State-backed insurgency.
Further afield, the thwarted transaction with MdR is a blow to JSW’s plans to mine more of the key materials required for making steel. The groups run by Sajjan and Naveen are among India’s biggest steelmakers, and both need to source large volumes of coking coal and iron ore for their operations.
JSW Steel said in an August presentation that the concession has the potential to produce 280 million tons of premium hard-coking coal.
