Mozambique’s future lies in black gold

Economic prospects for
Mozambique are burning
brighter thanks to the
discovery of vast reserves of coal.
Exploration undertaken so
far indicates that Mozambique
possesses at least 23 billion tonnes
of coal reserves.
Situated in remote parts of the
country, the deposits are sparking
the development of logistics
infrastructure that will benefit other
sectors of the economy.
Logistics companies are also
caught up in a “coal rush” as
they jockey for position to be the
preferred suppliers, first to the
developers of the mines, and then to
the mines themselves when exports
are fired up.
The initial phase of mining
coal at Moatize, in the western
Mozambican province of Tete,
is scheduled to start this month
(November), and the first coal
exports from the Moatize basin
should occur in the first half of
2011, according to the deputy
minister of Mineral Resources,
Abdul Razak Noormahomed.
A number of other companies are
also exploring the Tete coal deposits,
with some 105 exploration licences
having been issued.
Another three mines are expected
to be active in Tete within the next
three to six years, along with two
new power stations to provide the
electricity needed to run them. The
two projected power plans may
generate up to 2 000 megawatts of
energy, 1 500 of which by Vale and
500 by the Benga plant, and will be
linked to the national electricity grid.
Speaking at an international
conference on coal held in Maputo
in October, Razak said Mozambique
was positioning itself to become a
major player in the international coal
market over the medium term.
Logistics will be one of the
biggest challenges, although
Mozambique does have solutions.
The 547 km Sena coal railway
from the Moatize coal mines
to Beira was rebuilt by Indian
firms Rites and Ircon.
There have been a series of delays
to its completion, due to what Tete
provincial transport director Paz
Catruza describes as “technical and
material constraints” but the railway
should soon be ready to handle coal
produced on Brazilian firm Vale’s
Moatize project.
Vale will produce 11 mtpa from
2011, and could increase this to 26
mtpa in phase two of the project.
In addition, Riversdale of
Australia secured environmental
approval for its Benga coal project
in the same province in
January, granting the company
the right to produce 2 mtpa
coking and thermal coal in
the short term, eventually
ramping up to 20 mtpa.
Reserves are put at 4 bt
on Benga, plus 1.7 bt on the
nearby Zambeze concession.
Some of the coal will be
used to feed a new thermal
power plant to be built on the
field but most will be exported
via the Sena line.
It is becoming increasingly likely
that Beira will not be able to handle
all coal exports from Tete, so a new
rail link to the port of Nacala may
also be required to cope with rapidly
growing demand.
A further option is to send the coal
on barges down the Zambezi.
“As soon as the environmental
impact study is complete, we must
take the decision on whether or
not to ensure the navigability of
the Zambezi,” AMDC chairperson
Francisco Casimiro told reporters at
the conference.