Thai Moçambique Logística promises low-cost solution for transporting Mozambican coal

26 November 2014

The Thai Moçambique Logística consortium will create a “low cost logistics solution” to transport coal mined in Mozambique, particularly in Tete province, the consortium’s chief executive said in Maputo.

Almost a year after winning the tender launched by the government for the development and operation of a deep water port in the town of Macuse, in Zambezia province, and a railway line connecting the region to the Moatize coal basin in Tete the consortium of Mozambican and Thai investors has given assurances that it has a “solution” to the logistical challenges faced by the Mozambican coal sector, which it compared to low-cost civil aviation companies.

“If you were to compare our project with some airlines, I’d say that we achieve the essential objective of being the ‘low cost’ logistics solution for the Moatize basin,” said José Pires da Fonseca, during a conference on the coal sector, recently held in Maputo.

For the former director of CP Carga, of Portuguese state railway company Combois de (CP), the project’s has the “objective of transporting volume,” which can only be achieved with a “high performance corridor from a technical point of view,” that ensures transport costs “tend to stay more competitive.”

With feasibility, environmental and social impact studies still underway, José Pires da Fonseca said he believed the time is not right to reveal information about the route of the project but, given the information released by the government on the launch of the concession the railway line will be between 500 and 600 kilometres long.

“Let’s find the shortest route between the Moatize basin and a deep water port,” he said, adding that the railway would be comparable “to any international operation, such as in Australia, Brazil and other countries that compete Mozambique” in the coal market .

But for this to happen, the railway line will have to guarantee capacity to carry over 20 million tons, with an “international gauge that allows the circulation of 32 tons per axle trains,” which, in terms of load, could mean “a first phase,” of 25 million tons per year.

“From there up to 50 million tons the difference is very small,” said Pires da Fonseca, indicating that the “logistics project will have to be adjusted to the prices of low-quality products,” referring to thermal coal, which is less valuable than the metallurgical variety.

Bringing together Thai company Italthai Industrial Company Limited, with a 60 percent stake, Mozambican state port and railway company CFM, with 20 percent, and business group Zambezia Development Corridor (Codiza), also with 20 percent , Thai Mozambique Logistics will compete directly with the Sena Railroad, linking Tete to the port of Beira, in Sofala province, and the Nacala Corridor, which will soon be opened linking the Moatize region to the deep water port of Nacala-a-Velha, in Nampula province.

Operated by CFM and 575 kilometres long, the Sena line is currently the only railway solution for transporting Moatize coal, albeit with a load capacity far below the needs of the mining companies operating in this region: about 6.5 million tons.

The Nacala Corridor, which stretches for 912 kilometres crossing through Malawi, with a transport capacity of 18 million tons per year, is operated by Brazilian mining company Vale Moçambique (70 percent) and CFM (30 percent). (macauhub/MZ)