Coal India group may hand back coal blocks in Mozambique

5 June 2013

Indian state group Coal India Ltd. Is considering handing back two coal blocks in Mozambique due to a lack of logistics facilities to carry the coal away, a senior official told the Wall Street Journal.

The group was awarded two blocks in Tete province as part of an agreement between the governments of the two countries but they have been left almost entirely undeveloped due to problems with public tenders to hire a third party to mine the coal and a lack of progress in Mozambique in building roads, railways and ports.

“I don’t know when the required infrastructure to transport the coal will be built,” said the source, who asked not to be named.

The source contacted by the newspaper said that Coal India would announce its final decision on these two blocks in 2014, after carrying out as detailed an analysis as possible of the quantity and quality of coal in the blocks.

According to the figures recently published by the Mozambican government the two blocks contain around 1 million tons of high quality coal.

Any decision to leave Mozambique, where the group’s only international project is located, would be a blow to Coal India’s plans to reduce dependence on foreign suppliers, as the company provides 80 percent of India’s coal needs. (macauhub)