adminMozambique before the end of this year as it ramps up output at its flagship asset in the Southern African country.
Mining companies, including Brazil’s Vale and Rio Tinto have been investing heavily in Mozambique’s Tete province, eager to benefit from one of the world’s largest undeveloped coal regions.
David Premraj, in charge of corporate development at Beacon Hill, said on Friday that given Mozambique’s current infrastructure woes the company was using trucks to transport coal to its warehouses at the port of Beira.
The trucks can carry up to 500 000 tonnes of coal per year.
“Our intention is very much to have our first shipment before the end of the year,” he told Reuters in an interview, adding the initial shipment would be around 20 000 tonnes.
The first shipments will focus on thermal coal, while production of coking coal is expected to start in early 2012.
Minas will be ramping up to produce around 2,35 million tonnes of saleable coal a year. This will include around 0,92 million tonnes of coking coal. Out of the thermal coal produced at the mine, some
0,88 million tonnes are destined for exports and 0,55 million tonnes will supply the domestic and regional market in Africa, including the sugar, cement and tobacco industries.
The ramp-up of the mine will depend on the availability of adequate infrastructure, especially on the rail line linking the Moatize coal basin with Beira. Beacon hopes to secure a one million tonne allocation on the line in 2013, rising to 1,8 million tonnes by 2015.
“We would expect that we will ramp up production over the next two to three years,” Premraj said.
Premraj said the miner had signed a long-term off-take agreement with India’s Global Coke for up to 0,6 million tonnes of its coking coal and is in discussions with other parties.
Most of its coal would be destined for the Indian market.
“Given the geographic proximity to India, it makes sense and there is a huge demand for both coking and thermal coal from the steel producers and power companies,” he said.
Premraj said Mozambique was a good place in which to operate, with no signs of resource nationalism as witnessed in some other mining hubs across Africa.
Beacon Hill may pursue other opportunities in the country, either via exploration or tie-ups with other producers.
“We are proactively looking and are in discussions with other parties. As of today there is nothing specific,” he said. -Reuters.
He said the company was not interested in a listing on one of the major exchanges in London, Toronto, Sydney or Johannesburg at the moment.
“We have sufficient capital to get Minas Moatize to full production. At this point in time there are no plans to go to the market but things could change rather quickly,” he said. -Reuters.
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