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Coal India to take decide on Mozambique project later this year

New Delhi — State-run Coal India Ltd will make a decision on whether to continue with or scrap its first overseas coal project in Mozambique after September, a company official told Platts Friday.

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Coal samples from the two coal blocks at Motaize in Tete Province of Mozambique are being analyzed to ascertain the quality, the official said.

The process might go on until September and then the company would make the final call, he added, thus denying reports that the company was set to scrap the Mozambique project because of the poor quality of the coal deposits found there.

"No such decision has been taken," he said.


In 2009, the government of Mozambique had allocated two coal blocks at the Moatize coal field in Tete province, with total reserves of about 1 billion mt (of which 80% is thermal and 20% coking coal) to CIL's subsidiary Coal India Africana Limitada.

This is the first acquisition by CIL abroad on the basis of bilateral cooperation between the two governments.

The company expected to mine about 5 million mt/year from the two blocks for Indian consumption.

CIL has been falling short of targets in meeting growing coal demand in India and is looking at acquiring assets overseas to overcome the shortfall.

Meanwhile, the company has received four to five proposals from companies with mines in Indonesia and is in the process of carrying out due diligence on these assets, the CIL official said and added that no timeline has been fixed for this and once the due diligence was done, CIL's management would take the final decision.

Talking about CIL's plans to acquire coal assets in South Africa, the official said that no progress had been made, without giving more details.

CIL was to form a wholly owned subsidiary in South Africa to acquire and develop coal mines there.

The company had already signed a memorandum of understanding with the government of Limpopo province in 2011 to engage in joint initiatives on developing coal assets.

To implement the MoU, CIL has to set up a wholly owned subsidiary in South Africa.

--Sapna Dogra, newsdesk@platts.com
--Edited by Jonathan Dart, jonathan.dart@platts.com