Mozambique to become coal exporter within two years

Business Materials 11 August 2008 22:35 (UTC +04:00)

Mozambique is set to become a coal exporter within two years, after finishing the reconstruction of a railroad to transport the fuel from the west of the country to Beira port, Mozambique's daily Noticias newspaper reported Monday, dpa reported.

National mining director Fatima Mamade was quoted by the paper as saying that the railway would be operational by 2010 and would carry "the first quantities of mineral coal for exportation available" from the Moatize deposit in Tete province.

As international demand for minerals, particularly coal, climbs, big mining companies have started flocking into Mozambique.

Mozambican authorities have so far issued a total of 125 licenses for coal exploration, mostly in western Tete province and the northernmost province of Niassa.

Brazilian mining giant, Companhia Vale do Rio Doce (CVRD), last year was granted a 25-year concession to mine coal in Moatize, which is believed to contain 2.4 billion tonnes of coal deposits. CVRD is expected to begin mining in 2010.

Riversdale, an Australian company, says it has inferred there are 1.9 billion tonnes of coal deposits at its concession in Benga, near Moatize.

Changara Investments, a subsidiary of the London-based CAMEC (Central African Mining and Exploration Company), says it has inferred reserves of over 900 million tonnes of coal in another concession west of the Zambezi river.

All these companies face the same problem: how to move coal for export to the Indian Ocean coast.

The Sena railway line linking Moatize to the port of Beira was sabotaged during Mozambique's 1976-1992 civil war. Reconstruction of the line has already begun and is set to be completed by 2009.

Yet, even after its completion, the line will only be capable of moving eight million tons of coal per year, well below the combined projected output of the three companies, estimated at 40 million tons of coal a year.