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Africa coal plan makes headway

International Coal Ventures Private Ltd is set to start the mining of coking coal from its holdings in Mozambique.

By Jayanta Roy Chowdhury
  • Published 27.09.17

New Delhi, Sept. 26: International Coal Ventures Private Ltd is set to start the mining of coking coal from its holdings in Mozambique.

SAIL chairman P.K. Singh, who also heads ICVL, a joint venture with several other PSU firms, said "we have floated a tender for mining coking coal and will be awarding the work soon".

SAIL has faced huge problems in acquiring good quality coking coal, with the Australian mines jacking up prices, forcing the PSU to scout for alternative sources, including Canada and the US.

"Some 35 per cent of the deposit at our Mozambique mines is coking coal and we intend to have it mined and shipped home," the SAIL chairman said.

ICVL will ship the coal out of the country from Macuse, which has better rail connectivity with the Moatize region - in Tete province where the mines are located - compared to the Beira port, which ICVL had planned to use initially to export the coal.

Hard coking coal from Australia sells for $180-220 a tonne and the mining and shipping costs have to be well below that level for the venture to be profitable.

ICVL has floated a tender to sell thermal coal which makes up the bulk of the mine's deposits. The tender seeks buyers for 1.4 lakh tonnes of thermal coal.

ICVL had bought the mine three years back, but shipping the coal back to India was found to be expensive. Besides, much of the coal was of the steam coal, or the thermal coal variety, which was considered uneconomical.

Tenders were also floated for a thermal power plant in Mozambique to buy this coal, which did not materialise in the absence of a grid.

Supply to gas plants

The steel ministry is now studying the possibility of producing gas out of the thermal coal and shipping it back to the country.

India has 25,329 MW of gas-based power plants, of which 14,305 MW are either fully or partly non-functional because of the lack of gas. These plants are estimated to have cost Rs 1.24 lakh crore.

However, analysts felt unless global gas prices go up, the gassification of coal may not be very economic.

ICVL, a five-way joint venture among SAIL, CIL, RINL, NMDC and NTPC, had acquired Benga, an operating coal mine in Moatize, and other untapped reserves in Mozambique from Rio Tinto for $50 million in 2014.

ICVL was set up in 2009 to acquire coal assets overseas for Indian steel companies.

The operating coal mine in Mozambique comes with a wash plant and surface infrastructure.