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"Mozambique: Decision Soon on Use of Zambezi for Coal Exports
23 July 2010

Maputo The question of whether coal mined in the western Mozambican province of Tete can be exported by shipping it in barges down the Zambezi river will be decided within the next two months, according to the National Director of Mines, Eduardo Alexandre, interviewed in Friday's issue of the independent daily "O Pais".

He admitted that logistics is the major problem for the coal companies, since in the immediate future the only viable option is the Sena railway line that runs from the Moatize coal basin in Tete to the port of Beira.

The Sena line, which was comprehensively sabotaged by the apartheid backed Renamo rebels during the war of destabilisation, has now been rebuilt - but even so, it does not have the capacity to carry all the coal that will be mined by from the concessions granted to the Brazilian company Vale and to Riversdale Mining of Australia.

"The data we have indicate that the current capacity of the line is around six million tonnes a year", said Alexandre. But within two years the production from the Vale and Riversdale mines could reach eight million tonnes. The situation could therefore become "complicated" as from 2013-14.

Decisions were therefore urgently needed about other options, notably the use of the Zambezi, which is favored by Riversdale.

The medium term option is to build an entirely new railway from Moatize, across southern Malawi, to link up with Mozambique's northern corridor, to the port of Nacala. This should be taken very seriously, said Alexandre, "because Nacala has excellent conditions for the export of coal. It is a deep water port, it can receive very large ships, and it has no dredging costs. The forecast is that this railway could be ready in five years".

Vale has been enthusiastic about a new railway, but Alexandre warned that the Brazilians were much mistaken if they thought they could exclude their competitors from such a line. Mozambican law will not allow that.

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"Even if a company invests in an infrastructure, it cannot use it exclusively. That is inadmissible", he said. "There are obviously forms of compensation for the fact that the company has made an investment, but it has to make the line available for other operators".

Alexandre said that the known coal reserves in the Moatize basin amount to around 23 billion tonnes. It was economically viable to exploit about 70 per cent of this. But not all the basin has been explored, and so Alexandre expected the numbers to rise.

The president of the Mozambican Coal Development Association, Casimiro Francisco, has suggested that coal production could reach an annual figure of 50 million tonnes by 2015 and 120 million tonnes by 2020. Alexandre thought this was reasonable enough as a basic forecast, but warned that the figures could easily prove to be out by 30 per cent in either direction."