India considers coal gas project in Mozambique

31 October 2017

The Indian government is studying the economic viability of building a coal gas factory at the Mozambican mine of state consortium Indian Coal Ventures Limited (ICVL), announced the Ministry of steel, in a statement issued in Kolkata.

The statement added that the idea to build the factory came after the ICVL consortium launched a public tender to select a company to operate the coal mine in Mozambique’s Tete province.

The gasification of coal would allow the consortium, if it is economically viable, to use the low-quality coal extracted in the mine, which is not expected to find many buyers, said a government official quoted by the Indian press.

The official said estimates pointed to just 35% of the Tete mine’s production being coking or thermal coal of enough quality to be exported to India in order to feed the country’s steel plants.

The remaining coal in the mine will not be of sufficient quality to justify exporting it to India and attempts made so far to find a buyer in the region have been unsuccessful.

The idea of building a coal-fired thermal power plant with private capital was abandoned due to the difficulty in transporting the electricity produced there to the Mozambican national grid, which meant the consortium would have a large amount of coal without a specific use for it.

The ICVL consortium is a partnership of five Indian state groups – Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL), National Mineral Development Corporation (NMDC), National Thermal Power Corporation Limited (NTPC) and Coal India Limited (CIL) – which was formed to acquire stakes in mines abroad and ensure the supply of both thermal and coking coal.

In 2014, the consortium paid US$50 million for the coal assets of the Rio Tinto Group in Mozambique, and the Benga mine is the only one of these assets currently under exploration. (macauhub)