MAPUTO, Nov 23 (Reuters) - A consortium of South African and Swazi junior coal miners is exploring the option of building an alternative 6 million tonnes coal terminal in Maputo, Mozambique, that would exclusively handle B-grade steam coal, an official said on Wednesday.
Coal export allocation at ports and on rail lines has been the main challenge for junior coal miners hoping to export their product and supply a growing demand, especially from India.
The lack of export infrastructure has also affected the miners’ ability to source funding and offtake agreements for their coal, said Fleur Honeywill, an official at Ecca Mining Group, a junior miner which is representing the consortium.
“There are substantial B-Grade resources in close proximity to the Maputo Corridor - more than sufficient to warrant and sustain at least a 6 million tonnes per year coal terminal,” she told a coal conference in Maputo.
The group has been in discussions with the Mozambican port and railways authority CFM since October 2010 and is currently working on a bankable feasibility study for the project. Three potential sites in the Maputo port area have been identified.
“It will take another 6 months (for the study) and then it would take three years to get it to full completion,” Honeywill said, adding the project would cost at least 300 million rand ($35.62 million), although the studies are still ongoing.
Half of that would need to be spent on the port and the other on a rail line looping via Swaziland.
The consortium is in talks with South Africa’s Transnet on the line, Honeywill said.
She said the consortium had over 800 million mineable tonnes of coal, which underpins the investment case for the terminal.
“There is a huge untapped market from the Indian market looking for South African B-grade coal,” she said.
Honeywill said the terminal would not compete with already existing infrastructure at Maputo, which handles A-grade coal. That terminal at Matola, near Maputo, currently has a capacity of 6 million tonnes but logistics and shipping group Grindrod is planning to increase that capacity to 20 million tonnes.
$1 = 8.4222 South African rand Reporting by Agnieszka Flak and William Mapote; editing by James Jukwey