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Mozambique’s Ministry of Energy signed a development agreement with Clean Carbon Industries to undertake a full feasibility study into the construction of a plant capable of producing 40 000 barrels per day of transport fuel and chemical by-products from lower grade coal in Mozambique’s Tete Basin.
Clean Carbon Industries is a joint venture between Twin City Venture Capital, Hugh Brown & Associates, local Mozambique shareholders and a team of international engineering specialists.
Tete province is closer to Zimbabwe than Beira through which most of the country’s fuel is imported.
The plant will produce 40 000 barrels per day, half of which would be consumed in Mozambique with the balance exported to neighbouring countries.
“The Government of Mozambique has first call on the first 20 000 barrels per day produced by the plant, leaving excess capacity to be exported to Tanzania, Malawi, Zambia, Botswana and other regional SADC countries and/or be converted to chemical feedstock for export.
“The close proximity of the Tete basin to Malawi, Zimbabwe, and Tanzanian markets should extensively reduce the transportation cost of fuel to these markets,” Clean Carbon Industries (CCI) said in a statement.
Mozambique consumes about 17 000 barrels per day.
The study to produce oil from coal started in February last year and the results were released last month.
CCI said the bankable feasibility study would be completed by the end of 2014 while construction of the plant was expected to start in the first quarter of 2016.
The Tete Basin, in north west Mozambique, has extensive coking, thermal and low grade resources of coal and more than $4 billion has been invested in setting up coal mining infrastructure in the area.
CCI said coal used in the project was of low quality, unsustainable for exports and its conversion to oil would reduce coal stockpiles.
“The project will consume up to 17 million tonnes of coal per annum and will therefore make a large contribution to reducing environmental problems and costs associated with sequestrating waste coals in the basin. By producing fuel in Mozambique, the project will save the country millions in foreign exchange currently spent on importing transport fuels,” said the statement.
The chairman of CCI Mr Arnold Pistorius said the project would benefit the Sub-Saharan region and bring in new revenue streams for Mozambique.
“The acceleration of fuel costs in global markets creates enormous barriers for economic development. Mozambique has already made its mark in terms of being a reliable and growing investment destination; therefore the fuel and related value added products produced by CCI from low grade coal will no doubt further enhance entrepreneurial opportunities, and uplift Mozambicans.”
South Africa pioneered the development of oil from coal at its Sasol plant.
Online Reporter