Coal news and updates

ICVL to sell steam coal from Benga locally via EoI

International Coal Ventures Ltd (ICVL), which operates the Benga mine in Mozambique, is planning to sell thermal coal in local markets through the expression of interest (EoI) route even as it hopes to bring in that coal to India sometime in future after improvement in local infrastructure, a company official said.

In addition to coking coal, the company had mined around 350,000 tons of thermal coal from Benga in 2015 and had generated around 2.46 million tons of coal rejects, but could not sell most of it, the official said.

“Presently, we are stocking thermal coal and rejects. We have also invited an expression of interest (EoI) from some of the power producers within the region to sell the material,” the official told ICMW.

There are companies from neighboring countries like Zimbabwe and South Africa who had shown interest in ICVL’s thermal coal, he said.

“They (the power producers) have approached us several times, but we have told them to approach us through the EoI route,” the official said, adding, they will shortlist parties from among those who show interest and then supply coal on a long-term agreement basis.

Asked if it is possible by any chance to use that coal in India, the official replied in the affirmative.

Yes, it can be used (in India), but it will take time because the current cost of transporting coal from mine to port from where it can be brought to India is very high, the official said.

According to the official, the current cost or access fee for using the existing rail line for transporting coal to port is about $17.7 a ton and then there are other costs related to port handling, stacking and re-loading.

“The total freight cost for bringing coal from mine pit-head to vessels in Mozambique would be more than $40 per ton. Then there is sea freight for bringing it to India. So it is best to use that coal at the pithead,” the official added.

“I don’t think that in the next couple of years there will be market for thermal coal in Mozambique outside the African continent, but there are markets in the local area,” the official said.

He pointed out that ICVL has already sold some quantity of sized thermal coal (6 mm to 25 mm) at $40 per ton at the pithead itself.

“But that market is very limited because coal moves to nearby countries only through trucks and the quantity too is very low. So we are exploring how more volumes can be sold within the local areas,” the official added.