Mozambique set to get hydrocarbons billions, Vale unveils power station plan

28th September 2012 By: Keith Campbell - Creamer Media Senior Deputy Editor

The Confederation of Economic Associations of Mozambique expects that the South-East African country’s hydrocarbons sector will receive investments of more than $50-billion over the next seven to ten years. This was revealed in a recent seminar in the harbour town of Pemba in the country’s northernmost province of Cabo Delgado. Major gasfields lie off Pemba.

Speaking at the same seminar, the director-general of the country’s Investment Promotion Centre, Lourenço Sambo, affirmed that the time was ripe for local businesses to start cooperating with those international companies that were interested in investing in the country. The purpose of the seminar was to provide information for Mozambican businesspeople about the major projects in the hydrocarbons sector in the country to highlight opportunities for the country’s enterprises in the sector and to encourage the development of partnerships between local and international companies. Some 200 Mozambican businesspeople attended.

Meanwhile, Brazilian mining major Vale’s division in the country, Vale Mozambique, early this month announced that it was planning to build a coal-fired power station in the country. The value of the investment has not been revealed, but Vale Mozambique project implementation director Ricardo Saad reported that the power plant would have a capacity of 1 800 MW. It is not clear whether this will be MWt or MWe. (Previously, the diversified mining group had announced plans for a 300 MW coal-fired power station in the country.)

The plant will be constructed in Tete province, where the company has developed and is operating the biggest coal mine in the world, Moatize. Moatize Phase 1 will have an annual production capacity of 11-million tons, most of which will be metallurgical coal, but 2.5-million tons will be in the form of less valuable thermal coal. (The already approved Moatize Phase 2 will double production capacity to some 22-million tons, including about five-million tons of thermal coal.)

The idea is that the power plant will put part of Moatize’s thermal coal reserves to good use, generating electricity which will be used to strengthen the power grid centred on the Cahora Bassa hydroelectric power plant, which also lies in Tete province. “We are practically at the end of the work for the feasibility study in the area where we are going to set up the undertaking and we hope that it will be finished this year still, since the construction works will start in 2013,” said Saad.

As for the Moatize mine itself, Vale expects it to produce 4.6-million tons of coal this year, as it ramps up to full production, which should be reached in 2014 – full Phase 2 production capacity should be achieved by 2017. The mine started production last year.

“Our production is still restricted by the limited capacity of the port of Beira and the Sena railway line,” Saad explained. “We have a lot of production stockpiled at the mine and we hope that, when the renovation of the Sena line is concluded, we will be able to start accelerating our production capacity.” In addition, Vale is investing $4.5-billion in rehabilitating another railway line, to the port of Nacala, via Malawi, which, once finished, will be able to carry 30-million tons of coal a year, both from Moatize and from other companies’ coal mines in Tete.

Further, the company is developing its Scholar Visit Programme, which it launched in March and now involves ten schools in the area around Moatize and Tete city. Under this programme, children (accompanied by teachers) from these schools are taken on guided tours of the mine and its facilities, both to show and explain what happens there and to make them aware of future career opportunities provided by the company. These tours take place on Fridays and involve groups of 20 to 30 people. The company also provides tours for businesspeople, government and private institutions and nongovernmental organisations. During the first six months of this year, some 700 people (adults and children) toured the mine.