Maputo, Mozambique — 22 August 2013 – The government of Mozambique has granted two new coal mining concession in Tete province, valid for periods of 25 years each, to Rio Tinto Mozambique and Midwest Africa.

British mining company Beacon Hill Resources “’ an active coal producer and exporter in Mozambique “’ has set up a partnership with Midwest Africa Limited (MAL) to explore and develop a coal deposit covering an area of 184 sq km in Mozambique’s Tete province.

Macauhub News Agency reports that deputy mining resources minister, Abdul Razak said  that the two contracts would be made public as soon as they had been signed off by the Administrative Court, under the terms of the law on public-private partnerships, approved in 2011.

Midwest Africa’s project is located 50km from the city of Tete, and covers an area of 158.4 sq km. Its feasibility study showed estimated reserves of 480Mt of coal, of which 363Mt are coking coal and the remainder is thermal coal.

According to Mozambican daily newspaper Notícias, investment in this Indian project will total some US$1.416 billion and as of 2019 production is targeted to be 1Mtpa of coking coal and 6Mtpa of thermal coal.

The Mozambican state, represented by Empresa Moçambicana de Exploração Mineira, will have a 5% stake in the project, and another 5% will be sold on the stock exchange to Mozambican citizens.

The concession contract for Rio Tinto outlines exactly the same conditions.

Rio Tinto’s concession is on a project known as Zambeze, with an area of 97sq km about 10 km from the city of Tete, where the Anglo-Australian group plans to invest US$3.3 billion in order to produce, as of 2023, around 7Mtpa of coking coal and 5Mtpa of thermal coal.

Razak said that as of 2014 the railroad between Moatize and Nacala would be able to carry 18Mtpa of coal, in addition to the 6Mtpa now carried along the Sena Railroad linking the coal region to the port of Beira.

Source: Macauhub News Agency. For more information, click here.