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Indians to mine coal in Mozambique

Drilling underway at
Riversdale Mining’s
Benga coal project
Maputo, Mozambique — MININGREVIEW.COM — 23 March 2009 – The Mozambican government has approved a licence for the Indian company Coal India Limited (CIL) to prospect and mine for coal in two blocs in the coal-rich area of Moatize, in the country’s western province of Tete.

Reporting this development here, the "Noticias" daily newspaper said the concession followed the results of a public tender for three blocs that had been launched late last year by the government. The licence for the third bloc had been won by a Mozambican company.

The newspaper added that the next step would be for the companies which had won the concessions to present their investment plans, which should be in line with the terms of reference for prospection and geological research for coal in the country.

The two blocs granted to the Indian company occupy an area of 200 squ km. Coal India says that 85% of the extracted coal will be exported to India, and the Mozambican government is preparing to sign an agreement with the company to ensure that the remaining 15% will be used inside Mozambique.

CIL sources say the company intends completing its exploration activities in the two blocks within two years. A1 is said to be the more promising block with both coking and thermal coal potential. The company’s early estimates indicate that this bloc may have coal reserves of a billion tonnes.

Meanwhile plans to build a coal-fired power station in Tete, with the initial capacity to generate 500 megawatts, are well advanced, and construction should start before the end of 2009. This undertaking is to be carried out by the Australian company Riversdale Mining, at a cost of US2 billion (R20 billion). The work is expected to be completed within three years.

Riversdale Mining has been granted coal concessions in Tete covering around 290 000 hectares. The most promising of Riversdale’s areas is at Benga, in Moatize district.