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Indian coal consortium suffers huge losses in Mozambique

Indian public-owned consortium, International Coal Ventures Limited (ICVL) says it has been hit by losses in its Mozambique coal mining operations.

ICVL recently acquired three coal mines in Mozambique’s Tete province from mining giant Rio Tinto group.

The consortium officials said they posted a loss of $35 for each ton of extracted coal.

“Production costs at the Benga mine are currently $165/166 per ton, while the sale price for that same ton is around $130,” said Anil Chaudhary financial director of Steel Authority of India Ltd (SAIL) which is part of the ICVL consortium.

There are large mineral deposits in Mozambique but exploration has been constrained by the civil war (1977–1992) and poor infrastructure.

The mining sector in Mozambique contributes less than 5 percent to the nation’s gross domestic product (GDP).

The southern African nation exported its first batch of coal in 2011 and expects to become the world’s largest coal exporter. It is also spending about $50 billion in infrastructure projects to access its coal reserves.

Mozambique reportedly holds the fourth largest reserves of natural gas globally, after Russia, Iran and Qatar. Other minerals currently being mined in Mozambique include marble, bentonite, gold, bauxite, granite, titanium and gemstones.

Source: www.ventures-africa.com