Mozambique coal project to generate $1.5b a year

Coal projects in Mozambique’s resource-rich northernmost province of Tete will generate about $1.5 billion a year in revenue, starting from 2015, a senior government official said on Wednesday.

Eduardo Alexandre, Mozambique’s national director of mining, said the revenue would mainly be generated from coal projects being developed by Brazilian mining giant Vale and Australia’s Riversdale Mining.

“The two firms, Vale and Riversdale, will generate annual coal revenue of $1.5 billion in 2015 when both projects are fully up and running, this is a realistic forecast given (coal) demand,” Alexandre told Reuters in an interview.

Vale and Riversdale together are investing about $2 billion in projects that are expected to resuscitate coal mining in Tete by 2011.

“Our forecasts are based on the hopes of seeing coal production and exports beginning in 2011 as per the (companies’) plans. This is a resource which will also attract other investors,” Alexandre said.

Vale has a mining concession in the Tete district of Moatize, which sits on a massive and largely unexploited coal basin. Mining is expected to start next year, and at full capacity Vale predicts production of 8.5 million tonnes of hard coking coal and 2.5 million tonnes of thermal coal a year.

Riversdale says total estimates of coal resources at Benga are 4 billion tonnes — 319.9 million tonnes of measured resources, 730 million tonnes of indicated resources, and 2.99 billion tonnes of inferred resources.

Mozambique’s coal reserves are estimated at 10 billion tonnes.

The main countries that would import coal from Mozambique are Malawi, Tanzania, Zambia, Zimbabwe and the Democratic Republic of Congo.

The government says Mozambique could become the second biggest coal producer in Africa after South Africa once output gets into full swing.

Source: Reuters