Coal India group consigns US$42 million to social spending in Mozambique

25 June 2013

Mining group Coal India Ltd (CIL) has consigned US$42 million to social spending in Mozambique in order to overcome some obstacles that are apparently preventing it from commercial coal exploration, said a senior official from the group.

Cited by the Indian press, the official said that the social spending plan, which includes construction of two professional training institutes, had been presented to the Indian Foreign Affairs Ministry as the social investments will be analysed at bilateral meetings of the two countries.

The CIL group, which was granted two coal blocks in Tete province, central Mozambique, in 2009, at the end of last awarded the contract to explore the 205 square kilometres with estimated reserves of 1 billion tons of thermal coal and coke, to Tribeni Minerals.

According to the group official, the Mozambican government formally protested the delays in developing the two blocks and the fact that the social spending commitments were not following the agreed schedule.

The group argued that the social expenses could not be a condition for development of the blocks as its aims were purely commercial, which led the board of CIL to consider backing out of the two coal blocks.

However, the project continued due to an intervention by the Indian government, which considered that CIL’s backing out of the deal would create a bad impression in relation to India’s interest in that region of Africa, the official said. (macauhub)