031110 A new study has found that SA coal reserves have been significantly downsized since 2003.photo by Simphiwe Mbokazi 453

Dar Es Salaam - Tanzania has coal reserves of up to 5 billion tonnes, more than thrice its previously stated figure of about 1.5 billion tonnes, Energy and Minerals Minister Sospeter Muhongo said on Wednesday.

Tanzania produces coal from two mines mainly for domestic use, such as power generation.

It has plans to increase its coal-fired power generation capacity and could also export more.

Developing coal production is part of broader energy strategy, which includes exploiting recent big gas finds.

“Tanzania's total coal reserves were previously estimated at 1.5 billion tonnes and are now expected to have reached up to 5 billion tonnes,” the energy and minerals minister told a conference in Dar es Salaam.

“The government's power generation mix will focus on generating power from natural gas, coal, hydro-power and renewable energy sources,” he said.

In 2011 China's Sichuan Hongda Co. Ltd. signed a $3 billion deal with Tanzania to mine coal and iron ore and build a 600-megawatt coal-fired power plant.

Tancoal Energy, a joint venture between Australian-listed Intra Energy Corporation and Tanzania's government, runs the Ngaka coal project, while Tanzania's other mine at Kiwira is run by the state.

The government said plans were under way for Kiwira and Tancoal to each have power plants with 400 megawatts capacity.

Recent oil and gas finds in the east African nation are also expected to turn Tanzania into a hydrocarbons exporter.

The ministry's permanent secretary, Eliachim Maswi, told Reuters Tanzania would require a signature bonus of at least $2 million from firms winning blocks in an October oil and gas exploration bid round.

The government has said it plans to have in place new legislation to regulate natural gas during 2013/14 and this will come after the adoption of the natural gas policy.

“I believe before the end of next month we will have a natural gas policy,” Maswi said, speaking on the sidelines of the conference in the Tanzanian capital. - Reuters