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Coal: back on track.

Much has been written about Mozambique's approaching coal boom, not least in the pages of African Business. Coal production of up to loom tonnes a year could come on stream over the next 10 years, turning the country into an important new source of global coal supply and giving it the potential to challenge South Africa as the continent's biggest coal exporter. The pace of this development had been cast in doubt because of delays in constructing transport infrastructure to move the coal from Tete Province to the coast for export.

Thai Mozambique Logistica has signed an agreement with Maputo to construct a new coal export port at Macuse near the mouth of the River Zambezi, close to Quelimane in Zambezia Province. The company is owned by Italian Thai Development Company (60%), state-owned Portos e Caminhos de Ferro de Mocambique (20%) and Corredor do Desenvolvimento Integrado da Zambezia (20%).

The company will also construct a new 525 km railway from the mines to Macuse that will run parallel to the Zambezi, allowing all capacity on the other rail lines to the established ports of Nacala and Beira. Combined investment costs are put at $5bn.

Transport Minister Gabriel Muthisse said that the fact that the new line was the shortest route to the coast "means that it has great potential for establishing itself as one of the main, if not the main, export routes for the coal of Tete Province. All this is to ensure that Mozambican coal reaches international markets in the most competitive way possible".

New multi-purpose terminal

The new multi-purpose terminal at the Port of Nacala in Nampula Province is expected to open later this year and will have initial coal handling capacity of 14.5m tonnes a year.

Located at Nacala-a-Velha on the opposite side of Nacala Bay to the existing port, the terminal will cost $1bn but that does not include any rail investment. The 912 km connecting railway will pass from Tete into Malawi and then back into Mozambique again, incorporating 684 km of upgraded track and 228 km of new line. Nacala is reputed to be the deepest natural harbour on the east coast of Africa and so will be able to serve very large vessels of more than 200,000 dwt (deadweight tonnage). In January, Indian firm Essar announced plans for a new coal terminal at the Port of Beira with phase one handling capacity of 10m tonnes a year, to be doubled in phase two. According to sources in Mozambique, Essar will develop the New Coal Terminal of Beira (NCTB) under a long-term design, build, own, operate and transfer basis in partnership with CFM. An Essar spokesperson said: "The initial investment in the project would be around $2m. The government of Mozambique requires NCTB to furnish a bank guarantee, which is the signing and commencement of works guarantee."

All producers will be able to use the terminal. Work is under way to increase the capacity of the Sena Railway to Beira from the current 6.5m tonnes a year to 20m tonnes a year by February 2015. Mota Engil and the Visabeira Group of Portugal are undertaking the 162.7m [euro] contract ($226m), although much of the capacity will be created through the commissioning of new rolling stock.

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Title Annotation:REGIONAL FOCUS: Mozambique
Publication:African Business
Geographic Code:6MOZA
Date:Jun 1, 2014
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