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Project work worth $200bn to be available in Moz coal sector in next 20 years

RSV ENCO strategic development executive Rowan Karstel discusses the opportunities and challenges faced by companies operating in Mozambique's natural resources sector

26th June 2015

By: Ilan Solomons

Creamer Media Staff Writer

  

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Engineering design and project management consultancy RSV ENCO Consulting strategic development executive Rowan Karstel says there are significant opportunities for companies to profit from Mozambique’s resource sector.

“The province of Tete alone has inferred total coal reserves of about 23-billion tons,” he highlights.
Karstel states that there will be project work worth about $200-billion undertaken in Mozambique over the next 20 years, mostly in the country’s coal and gas sectors.
“The country possesses good-quality coking coal and also has substantial volumes of coal that is in line with Indian thermal coal specifications.”

He notes that the continuing growth of India’s economy will ensure that coal companies operating in Mozambique will be able to secure long-term offtake agreements with Indian commodity traders.

Further, Karstel says that India is “chronically short” of power and only 25% of the population has access to electricity.

He highlights that India’s domestic coal reserves in the north-east of the country as well as its new coal-fired power stations that are being built in the south and the west of the country will be better served by imported coal.

Karstel also notes that India’s coal import volumes have increased at a compound annual growth rate of 21% since 2008, which further highlights India’s sustained reliance on coal for power generation purposes.

“India, in the next five years, also plans to add 62 000 MW of power generation mostly from coal resources,” he adds.

One of the biggest challenges facing mining companies in Mozambique is ensuring that effective logistics programmes are put in place.

“The country’s rail infrastructure is underdeveloped and very expensive. The government must find ways to make it cheaper,” emphasises Karstel.

Moreover, he points out that government has to continue working with mining companies to improve railway networks to ensure that product can be efficiently railed to ports for exportation.

“With regard to the gas sector, government has to finalise its policies to ensure certainty for companies. “This will enable companies to raise capital, thereby enabling faster development of projects, which will create many job opportunities and alleviate poverty levels in the country,” states Karstel.

Karstel was a speaker at black-owned training and conferencing company Intelligence Transfer Centre’s second yearly Coal Transportation Africa summit, held in Johannesburg last month.

 

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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