Another Indian investment in Moz coal sector

This Reuters-reported acquisition adds traction to the notion that foreign coalfields  are being lined up to bridge the gap between domestic demand and supply of coal in the growing economy of power-hungry India. It also reflects a widening Indian footprint on Mozambique's steadily developing – but currently  infrastructure-deficient – coal mining industry. GK.

MAPUTO (Reuters) – The Mozambique subsidiary of India's Sunflag group, Sol Mineração Moçambique, is poised to invest $222 million in a coal mine in the Mutarara district, a senior government source told Reuters on Friday.

The source said Mozambique's government awarded the firm the Tete province coal mine, which has reserves of 115.46 million tonnes of coal, according the feasibility studies.

The Indian subsidiary will explore the mine, which has an estimated life span of 25 years, starting in 2017.

Mozambique's government on Thursday signed the concession contract with the company, which is expected to produce 5 million tonnes of raw coal a year, both coking and thermal coal.

It is expected that upon starting the exploration of the coal mines the company will pay $300 million a year in taxes to the Mozambican authorities, the source said.