Coal India group files report on social expenses of coal project in Mozambique

21 June 2013

Indian state group Coal India Ltd (CIL) has filed a final report on social expenses related to its coal project in Mozambique with the Coal Ministry, India’s Business Standard newspaper reported.

According to the newspaper, the amount of social expenses in Mozambique, specifically construction of two professional training institutes, has been a point of contention between the Indian and Mozambican governments and has delayed the international project of one of the world’s largest mining groups.

A senior official from the group told the Business Standard that the report submitted to the Ministry included costs of 1.5 billion rupees (US$41.8 million) to build and equip the two institutes.

“We plan to start the third and final phase of prospecting in December and start mining operations in 2016/17,” the official told the newspaper.

In Mozambique, Coal India Ltd was granted a concession on two blocks in Tete province with estimated coal reserves of over 1 billion tons, under the terms of an agreement between the two governments.

Exploration of the blocks has been slow, with a number of delays in granting tenders and differences of opinion between the two governments related to social costs, in addition to the lack of a logistics network, particularly roads and railways, as well as port facilities.

“We assume that when we start mining coal in 2016, the Mozambican government will have built the infrastructure needed to transport the coal,” the CIL group official said. (macauhub)