UPDATE 2-Mozambique to seek $2 bln port and rail bids

Wed Nov 21, 2012 10:04am EST

* Tender for 525 km rail line, port from Moatize to Macuse

* Sena line upgrade to 6.5 mln T seen completed by end-2012

* Expansion of Sena to 20 mln T seen completed by end-2014

By Agnieszka Flak

MAPUTO, Nov 21 (Reuters) - Mozambique plans to solicit international bids for a $2 billion railway and port development project next month to boost its coal exports, the chairman of state-owned rail and ports group CFM said on Wednesday.

Infrastructure bottlenecks are the main headache for mining companies eager to participate in Mozambique's coal rush and various firms have proposed projects to either upgrade old and dilapidated rail lines or build new ones.

"By the end of this year we should issue the tender. The project will cost around $2 billion, including the port," Rosario Mualeia said on the sidelines of a Coaltrans conference.

The tender will be for a 525 km line from the Tete province to Macuse, in Mozambique's Zambezia province, and a new port, able to handle around 20 million tonnes of coal per year.

Mualeia also said a delayed upgrade of CFM's Sena line, the only railway linking the coal-rich Moatize basin with the coast, to enable it to carry 6.5 million tonnes of coal, will be completed by the end of the year.

The upgrade on the line, which now only carries around 3 million tonnes of coal, was delayed due to derailments, lack of qualified drivers and the poor quality of work done by a contractor previously in charge of the project.

A further upgrade to 20 million tonnes is scheduled for completion by end of 2014, he added.

Mualeia said the various rail and port projects in the pipeline that together will raise the coal export capacity from Moatize to more than 120 million tonnes per year, should be completed within five years at a total cost of $12 billion.

He said an independent operator will be set up next year to manage the running of the various lines while rates and access to the line will be managed by a state regulator.

Mualeia said he did not foresee problems in sourcing funds for all the projects in the pipeline because the planned and existing mines in the Tete province were viable.

Mozambique, a former Portuguese colony which emerged from civil war two decades ago, boasts some of the world's largest untapped coal reserves and is expected to become a key source of sought-after premium, hard coking coal, used in steel making.

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