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Another Indian miner set to start coal production in Mozambique

12th December 2014

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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Indian State-owned miner Coal India is to soon start mining in Mozambique, The Economic Times newspaper has reported from Kolkata (Calcutta). Although the company is a partner in another Indian miner, International Coal Ventures Limited (ICVL), which now owns and operates the Benga mine, in Mozambique’s Tete province, Coal India also has its own coal projects in the African country.

The company has concessions on two mining blocks and plans to develop mines on both of them. “The final phase of exploration for Coal India’s A1 and A2 mining blocks, in Tete province, in Mozambique, is complete,” an unidentified senior official of the company told the newspaper. “Coal sampling is in progress. [A] geological report and detailed project report will be prepared. “We hope to start mining within six months to a year.”

These concessions, like ICVL’s Benga operation, are in Tete province’s Moatize district. They cover an area of more than 200 km2. They were awarded to the company in August 2009 and the project is being run by its Mozambique-based subsidiary, Coal India Africana Limitada. The mines are expected to start supply- ing coal to India within three to four years from now.

Back in September, Coal India revealed that it had carried out exploration drilling totalling some 35 000 m on the two blocks during the 2013/14 financial year (FY). “Around 15 000 m of geophysical logging has been carried out in FY ’14,” stated the company. The coal samples were evaluated in India at the country’s Central Mine Planning & Design Institute and at the Council for Scientific and Industrial Research (founded in 1942 and not to be confused with the South African institute of the same name).

At that time, Coal India also reported that it was planning to set up a an advisory panel that would help it buy, develop and operate coal mines abroad. The miner indicated that it was looking at buying further overseas assets to supply India’s coal needs. It had already invited bankers and other interested parties to submit bids regarding the purchase of foreign assets. These decisions and actions followed a previous statement by the country’s Coal Ministry that there should be a programme for the “aggressive” acquisition of overseas coal mines to address India’s energy needs.

The Indian government is encouraging State-owned miners to seek foreign coal assets to help address the country’s current shortage of coal. In particular, a lack of thermal coal is imposing significant constraints on the country’s power generation. Indian private-sector miners are also pursuing new projects at home and abroad while stepping up production at their current domestic operations. (The newspaper cited the Adani group, planning to mine coal in Australia, and the Sanjiv Goenka group, seeking to do the same in South Africa, as examples of Indian private-sector groups developing foreign coal projects.)

Observers in India believe that all these projects, local and foreign, should start to deliver coal during the next three or four years – and that the combination of increased local production and imports from overseas operations could end up exceeding the country’s needs.

“If all clearances are in place, five years is more than enough time to start production at a coal mine,” an anonymous analyst with an unnamed ratings company told The Economic Times. “Going by that calculation, if private coal producers can adhere to their production schedules, the imported coal could turn out to be in excess of requirement.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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