Coal gas may help Mozambique reduce cost of fuel imports

13 May 2011

Maputo, Mozambique, 13 May – Transforming coal with high ash content into liquid fuel, which Brazil’s Vale plans to do at its coal mining project in Tete province, is expected to have a positive impact on Mozambique’s energy costs, according to Mozambican daily newspaper Notícias.

The facility will have capacity to produce 300 million litres of diesel per year and around half of that will be consumed by Vale itself and the remainder will be sold on the open market.

Vale’s chief executive, Roger Agnelli, who travelled to Mozambique for the formal launch of the activities of subsidiary Vale Moçambique, said that the coal gas project was currently being studied and that its execution would involve a technological partnership with a Portuguese company.

The amount of investment that may be involved in setting up the project has not been announced and the project’s budget will be dictated by the studies that are now underway.

“We are in the study phase and it is due to be concluded in the next few months. It will be the first project of its kind in Mozambique and will help the country to reduce its deficit from imports of oil derivatives.”

In 2010 Mozambique imported fuel costing a total of US$530 million. (macauhub)