Indian investment in Mozambique aims to reduce logistics cost for coal miners

India’s Essar Group, which operates Indian ports handling 82 million tons per annum (mtpa) with expansion to 110 mtpa in the near future, will be investing $440 million in creating a New Coal Terminal at Beira Mozambique, Captain Tej Nargundkar, the CEO of Mozambique, Essar Ports Limited, told the IHS South African Coal Export Conference in Cape Town South Africa.

Essar signed a 30-year (with possibility of 10 years extension) Concession Contract in February 2017 and the first phase of 10 mpta capacity with a project value of $260 million is due for completion in 2020. The second phase will be launched depending on the success of the first phase.

Although Beira has a severe limitation in that it can only accept ships with a draft of less than 12 meters, the 50 000 ton limitation on ships is not a limiting factor when exporting to India, where many of the ports are also not deep water ports.

The prime function of the new coal terminal is to serve as the port for exporting coal from the coal rich region of Tete / Maotize region of central Mozambique to supply the increasing coal demand, especially of the Indian markets.

The terminal at Beira is only 580 kilometres away from the coal fields on the Sena line, whereas Brazilian company Vale and Japanese company Mitsui have chosen to export via the deep water port of Nacala, but where the distance is substantially longer at 912 kilometres and runs through Malawi as well.

There has been increasing demand from Indian steel makers for coking coal and in 2016, they imported 50 million tons and this is set to grow by more than 15% per year over the next few years as more steel capacity is added in India.

Nacala rail and coal port infrastructure are currently available only for Vale’s coal, so no capacity has been made available for other miners to export.

The existing coal berth at Beira No 8 Quay has limited capacity of 6 mtpa with average coal exports from Quay 8 have been around 3.5 mtpa over the past five years.

Several other miners in Mozambique (Minas Revuboe, ETA Star, ENRC, Sun Flag Group, Midwest,Coal India, etc.) have not developed their coal mining deposits due to the lack of port facilities as a mine without a logistics chain is just a hole in the ground.

The new terminal will be an all-weather fully mechanized terminal with the unloading of wagons, movement through conveyors to yard, stock piling, evacuation from yard through conveyors and loading into vessel through ship loader.

The berth in the first phase will be 300 meters long and 24 meters wide, while the stockpile yard will have a capacity of 700 000 tons in the first phase.

There will be a 4 000 ton per hour ship loader, while two Stacker/Reclaimers will also be able to handle 4 000 tons per hour.

Source: The Brics Post