Mozambique Mining Industry: “Boost Logistics to increase competitiveness of country’s coal”, economists say

The President of the Mozambican Association of Economists, Tobias Dai, Tuesday in Maputo called for public-private partnerships to be created for the development of a logistics chain to increase the international competitiveness of the coal mined in Mozambique.

Given that the investment model based on a two-pronged approach focused on mining and logistics has led to continual losses to business competitiveness, the Mozambican economist proposed the identification of international “accredited logistics operators and with capacity to invest,” in the development of rail and port facilities in Mozambique.

Dai, who was speaking at the launch of the 4th Annual Conference on Mozambican Coal, which os on until Thursday in the Mozambican capital, also said the modernisation of these facilities was an essential element in the recovery of the competitiveness of the Mozambican coal sector in international markets and especially “the Indian basin”, where countries like Mozambique compete with the likes of “South Africa, Russia, Indonesia and Australia.”

Comparing the Mozambican rail capacity with Australia, the economist said that on the Sena railway, the main route for transporting coal from the Tete region and the port of Beira, the transport capacity of one train is about 2,400 tons, compared to 40,000 tons in Australia.

“In Mozambique, we use the Cape gauge (about 20 tonnes per axle), compared to a maximum of 42 tons per axle standard gauge used in South Africa or Australia,” he said, noting “economies of scale are needed” to increase the competitiveness of the Mozambican coal sector.

The imminent launch of coal transport along the Moatize-Nacala railway line and to the port of Nacala-a-Velha, projects in which mining company Vale Moçambique has invested more than US$4 billion, will increase transport capacity to 18 million tons. Capacity currently stands at 6.5 million tons, but the country needs to reach more than 40 million tons a year if it plans to be amongst the world’s top 10 coal exporters, Dai said.

At the launch of the conference representatives of the Mozambican Ministry of Mining Resources presented changes in the new mining law, which was recently enacted, notably a reduction of the renewal period for prospecting and surveying licenses from five to three years and a requirement for licensees to be registered in Mozambique.

As part of the recently approved Review of Taxation Schemes on Mining Activities, the government has also approved a reduced royalties on diamond mining from 10 percent to 8 percent, on precious metals, 10 percent to 6 percent, basic minerals (including coal), from 5 percent to 3 percent, and sand and stone, from 3 percent to 1.5 percent, with the exception of semi-precious stones that are taxed at a rate of 6 percent. (Source: Macauhub)