Mozambique Mining Industry: Coal India plans to buy stake in railway project

Indian state company Coal India Ltd. (CIL) is analysing the acquisition of a controlling stake in a rail project in Mozambique as a way of improving coal transport from the mines it plans to operate in the country, according to Indian newspaper the Economic Times, quoted by Macauhub news agency.

A CIL senior official told the newspaper that, although the idea is that the controlling stake would make coal transport easier “everything is still at an early stage.”

CIL holds a license in Mozambique for coal exploration in Tete province, which is due to end in August of this year. Its subsidiary Coal India Africana Limitada has yet to launch the third phase of exploration or to begin analysing samples collected in the first two phases.

“Our license ends in August but we are going to ask for an additional period of four years,” said the official cited by the Economic Times, adding that the samples collected in the first two phases were on their way to India.

The blocks granted to Coal India Ltd. Contain various types of coal including coal of the highest quality, or coking coal, which has made it difficult for the company to reach a conclusion about whether the existing coal makes the project economically viable.

The newspaper added that is the Mozambican authorities granted the four-year extension on the license CIL would accept proposals from companies interested in carrying out the third phase of exploration, which will involve test drilling of up to 10,000 metres