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Indian company mulls major developments at its Mozambique mine

6th February 2015

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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Indian State-owned company International Coal Ventures Limited (ICVL) is to invest some $1.9-billion in Mozambique. This has been revealed by ICVL Mozambique director- general Nirmal Chandra Jha to The Indian Express newspaper. The company now owns 65% of the Benga coal operation, and 100% of the Zambeze and Tete East coal projects, in the African country’s Tete province, having bought them from Rio Tinto (reportedly for $50- million) last year.

ICVL will use the money to construct a 300 MW thermal power station at the mine, increase Benga’s output to 13-million tons by 2017 and set up a coal-to-liquids (CTL) plant. On January 12, the company invited expressions of interest for the construction of the CTL plant. This is expected to cost more than $300- million, the thermal power station about $830-million and the expansion of the Benga operation around $800-million.

ICVL is a special purpose vehicle created at the initiative of the Indian Ministry of Steel, with the purpose of obtaining metallurgical and thermal coal assets in foreign countries, in order to assure the supply of imported coal. It is a partnership between the Steel Authority of India Limited (SAIL), Coal of India Limited, Rashtriya Ispat Nigam Limited (RINL – a steel company), the National Mineral Development Corporation and NTPC (India’s largest power producer). All these companies are wholly or predominantly State-owned. India cannot domestically produce enough metallurgical or coking coal to meet the current needs of its steel industry. These needs are increasing, as both SAIL and RINL are in the middle of major production capacity expansion programmes.

So far, ICVL has exported three shipments of coking coal from Benga to India to feed blast furnaces at both SAIL and RINL steelworks. Five more such export shipments are planned for this year. Jha expects the “crisis” regarding the supply of coking coal to India’s State-owned steel- makers to come to an end in the near future. He affirmed that the Benga and (once they had entered operation) Zambeze and Tete East mines would be apply to supply these steel plants with their required metallurgical coal for, at a minimum, the next 35 years.

The decisions to set up the thermal power station and CTL plants at Benga were taken in order to achieve economies of scale at the operation. While 70% of Benga’s reserves of 2.6-million tons are metallurgical coal, the remaining 30% is thermal coal.

Meanwhile, the executive director of the Botswana Chamber of Mines, Charles Siwawa, has told the O País newspaper in Maputo that coal miners in his country intend to start exporting their output through South Africa, using the Port of Richards Bay, and Mozambique, using the Port of Maputo. These routes will be used until the completion of the Trans-Kalahari Railway. This will run for 1 500 km and connect the mines of Botswana’s Mmamabula coalfields to the Namibian port of Walvis Bay. The Trans-Kalahari is expected to cost some $9.2-billion, which will be raised from private investors.

The feasibility study for the project, that has been agreed by the Botswanan and Namibian governments, is expected to be published early this year. Siwawa observed that any delay in the completion of the new railway and/or the associated coal terminal at Walvis Bay could be disastrous for Botswana’s economic ambitions, which include becoming a coal supplier to India and China. (It should be noted that there has been a proposal that, once built, the Trans-Kalahari could be extended to reach the Waterberg coalfield in South Africa.)

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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