Coal reserves in Niassa province, Mozambique, may be as big as those in Tete

12 September 2011

London, United Kingdom, 12 Sept – Coal reserves in Niassa province, in northwest Mozambique, may be as big as those in the neighbouring province of Tete, which are considered to be the largest n the world, according to the Economist Intelligence Unit (EIU).

“Mozambique may be on the brink of discovering a new area of coal deposits. So far, all mining activities have been in Tete province,” said the EIU in its latest report on Mozambique.

Citing Mozambican officials, the EIU analysts said that the exploration work indicated the possibility of “enormous” new deposits in Maniamba district, in Niassa, “which could rival in size those in Tete.”

There are currently seven companies carrying out prospecting work in Maniamba, including the country’s two largest coal producers, Brazil’s Vale and Australia’s Riversdale Mining.

Over the next two years, it will be possible to confirm with clarity the feasibility of commercial mining of the reserves.

Also according to the EIU, Vale is close to concluding a feasibility study for a phosphate mine in Monapo, Nampula province, which it plans to formally submit to the Mozambican authorities at the beginning of next year.

“Mozambique continues to see expansion of mining investment, particularly in coal, in which a number of large investments are on the brink of transforming the country into a large international producer,” said the British analysts.

Mozambique’s National Director for Mines, Eduardo Alexandre, recently said that coal exports will more than double the contribution of the mining sector to Mozambique’s gross domestic product (GDP) in the next three years, rising from 3 percent at the moment to 7 percent.

The mining sector in Mozambique includes production of electricity, heavy sands and other resources such as coal, reserves of which in Moatize, Tete province, are considered to be the largest in the world.

The Moma mine, owned by Ireland’s Kenmare Resources is already operating, and, at the end of the year, production at the Benga coal mine, owned by Australia’s Riversdale Mining, is also due to begin.

Largely because of increasing investment in mining and infrastructure projects, the EIU projects average economic growth of 7.4 percent per year for the Mozambican economy in 2011 and 2012, with inflation dropping to 5 percent next year.

In order to accommodate increased coal exports the port of Maputo recently announced an expansion programme and the operator of the Matola coal terminal, south Africa’s Grindrod, is concluding a feasibility study to more than double capacity by 2014, to 20 million tons per year.

The coal sector is of particular interest to companies from India, China and Russia and the Mozambican authorities have already said that five new mining concessions would be granted by the end of the year, according to the EIU report. (macauhub)