Indian company International Coal Ventures Limited (ICVL) has despatched its first shipment of coal from its recently acquired Benga mine, in Mozambique, to India. This shipment was composed of metallurgical, or coking, coal and was sent to the Steel Authority of India (SAIL). This was revealed to the Press Trust of India (PTI) by ICVL chairperson (and head of SAIL) CS Verma on November 18. The size of the shipment was not revealed.
ICVL is a ‘special-purpose vehicle’ created in 2009 on the initiative of the Indian Ministry of Steel for the purpose of obtaining metallurgical and thermal coal assets in foreign countries in order to ensure the supply of imported coal. It is a partnership between SAIL, Coal of India Limited, Rashtriya Ispat Nigam Limited (RINL – a steel company), the National Mineral Development Corporation (NMDC) and NTPC (India’s largest power producer). All these companies are wholly or predominantly State-owned.
The acquisition of the openpit Benga mine was a major step in fulfilling ICVL’s mandate, although it is currently losing money. The Mozambique operation currently has an output of some fi e-million tons a year (Mt/y) and reserves of one-billion tons, 70% of which is metallurgical coal, for steelmaking. ICVL bought a 65% share in the mine from Rio Tinto, reportedly for only $50-million. The remaining 35% is owned by Indian private-sector group Tata Steel. The sale of Rio Tinto’s share to ICVL was concluded in early October.
The importance of the Benga operation to the ICVL partner companies is made clear by the plans of SAIL and RINL to increase their steel production and of NMDC to set up an integrated steel plant. SAIL intends to increase its steel production capacity to 23 Mt/y and RINL will go to 6.3 Mt/y. This will increase their joint demand for metallurgical coal to some 25 Mt/y next year. It is reported that, currently, SAIL has to import 75% of its metallurgical coal requirements, while the figure for RINL is 100%. In total, India currently imports about 40-million tons of metallurgical coal a year. As for NMDC, its new steel plant will have a capacity of 3 Mt/y.
Benga also produces thermal coal and the day before Verma’s statement to the PTI, ICVL CEO Ajay Mathur told the Bloomberg news agency that the company intended to build a power station at the mine, which is in Tete province. It would use “some of the thermal coal and waste product to generate power locally”, he said. He gave no indication of the generating capacity of the planned station, but stated that it would be developed “very soon”, with the go-ahead to be given “once we are comfortable there is no problem with selling power”. There was also no indication of the investment that will be made into the project. Other companies already planning to construct coal-fired power stations in Tete province are London-listed Ncondezi Energy, Brazilian mining group Vale and Kazakhstan-based Eurasian Natural Resources Corporation.
Separately, news agency Macauhub has reported that the feasibility study into the Tete–Maputo Energy Transmission project (acronymed to Cesul in Portuguese) is almost complete and will be submitted in the early months of next year. The agency cited the Norwegian embassy’s counsellor, Camilla Helgo, as its source. Norway is funding the feasibility study, which is costing some $76.6-million and is being carried out by Norwegian consultancy Norconsult. The World Bank is also providing support for the study.
Cesul, known colloquially as the ‘dorsal spine’, would create a transmission network linking planned power stations in Tete to the country’s central and southern regions, with a secondary link to Malawi. The Cesul consortium is composed of the China State Grid Corporation (CSGC), with a shareholding of 46%, South African utility Eskom (25%), Mozambique utility Electricidade de Moçambique (15%) and Portugal’s Redes Energéticas Nacionais (REN), with 14%. CSGC also has a 25% shareholding in REN.