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.