Coal India abandons coal project in Mozambique

9 February 2015

Indian state monopoly Coal India Ltd (CIL) is expected to leave a coal mining project in Mozambique given that the coal in the two blocks “does not have enough quality to be called coal,” said a senior executive from the group.

The executive, speaking off-the-record to Indian newspaper the Economic Times, said the existing coal in the two blocks is not good enough to be consumed even in Indian power plants, which are designed to be fed with low-quality coal.

The Coal India group has already spent about US$80 million in the exploration of the two blocks, with the top executive noting that the coal contained in these two blocks cannot generate a return on investment of 12 percent in the medium to long term.

“Speaking clearly, I can say that what there is there cannot be called coal,” the executive told the Economic Times.

Six years ago the CIL group was granted a five-year exploration and development license for blocks A1 and A2, both located in the province of Tete, and founded the Coal India Africana subsidiary to lead the project coal mining and exploration project.

The executive told the newspaper that the group was led to believe that 20 percent of the reserves were of higher quality coal for use in the steel industry, the remainder being of thermal coal to fuel power stations.

But after samples were sent to India for laboratory analysis it was found that the coal was of very poor quality, and contained insufficient carbon to be called coal. (macauhub/MZ)