Maputo eyes $2bn railway and port to cash in on coal rush

Reuters Maputo

MOZAMBIQUE planned to solicit international bids for a $2 billion (R17.7bn) railway and port development project next month to boost its coal exports, Rosario Mualeia, the chairman of state-owned rail and ports group CFM, said yesterday.

Infrastructure bottlenecks are the main headache for mining companies eager to participate in Mozambique’s coal rush and various companies have proposed projects to either upgrade old and dilapidated railway lines or build new ones.

“By the end of this year we should issue the tender. The project will cost around $2bn, including the port,” Rosario said on the sidelines of a Coaltrans Mozambique conference.

The tender will solicit bids to build a 525km line from the coalfields in Tete province to Macuse, in the central Zambezia province, and a new port, able to handle around 20 million tons of coal a year.

Mualeia said that a delayed upgrade of CFM’s Sena line, the only railway linking the coal-rich Moatize basin with the coast, to enable it to carry 6.5 million tons of coal annually, would be completed by the end of the year.

The upgrade on the line, which carries around 3 million tons of coal to the port of Beira, was delayed by derailments, lack of qualified drivers and the poor quality of work done by a contractor previously in charge of the project.

Mualeia said that the various rail and port projects in the pipeline that together would raise the coal export capacity from Moatize to more than 120 million tons a year, should be completed within five years at a total cost of $12bn.

He said that an independent operator would be set up next year to manage the running of the various lines while rates and access to the line would be managed by a state regulator.

Mozambique, a former Portuguese colony which emerged from civil war two decades ago, boasts some of the world’s largest untapped coal reserves and is expected to become a key source of sought-after premium, hard coking coal, used in steel making.