Indian group could build power plant at Moz coal mine

15th July 2016 By: Keith Campbell - Creamer Media Senior Deputy Editor

Indian coal company International Coal Ventures Limited (ICVL) is considering building a thermal power plant at its Benga coal mine, in Mozambique’s Tete province. ICVL is a consortium of State-owned companies, originally created in 2009 in an initiative by the Ministry of Steel, the main members being the Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL – another steel company) and the National Mineral Development Corporation (NMDC – India’s largest State-owned miner).

“We see a lot of potential in Mozambique and we would like to harness it,” SAIL chairperson PK Singh told The Economic Times. “ICVL’s mines in that country contain 65% thermal coal reserves, with the rest being coking coal. There is a possibility of setting up a thermal power plant there.” He was speaking just before Indian Prime Minister Narendra Modi left for his recent State visits (July 7 to July 11) to four African countries, including Mozambique (the other three being Kenya, South Africa and Tanzania).

However, the success of the proposed power plant is seen as being dependent on two other founder members of ICVL remaining in the consortium. These are NTPC (India’s largest power producer; NTPC originally stood for National Thermal Power Corporation, but that name is no longer used) and Coal of India Limited (CIL). CIL decided to withdraw from ICVL in February last year and NTPC has requested of the Ministry of Power that it be allowed to leave the consortium as well. The two companies believe that ICVL is focused on coking coal for steelmaking, whereas their interest is in thermal coal. But it is precisely their focus on thermal coal and their expertise in coal-fired power generation that make them essential partners if the Benga power station plan is to go ahead. So, both companies have been requested to reconsider their decisions to exit ICVL.

“NTPC has core competence in power generation, a strength that will be crucial in the venture, while Coal India, the largest domestic coal producer, has proven expertise in mining,” a senior Indian government official told the Mumbai-based newspaper, on condition of anonymity. “The power generated in Mozambique can be fed to other African countries too.”

The proposed power plant will have an initial generating capacity of 200 MW, but this could, in time, be expanded to 2 000 MW. ICVL owns 65% of Benga, the other 35% being held by another Indian business, the private-sector Tata Steel. ICVL acquired its share (along with 100% of the Tete East and Zambezi coal assets) from Rio Tinto in 2014 for a reported $50-million.