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Two more companies have been granted coal mining concessions in the Tete province of Mozambique, despite the fall in global coal prices which have put the already operating mines in the province under pressure. The new concessions were granted to the Eurasian Natural Resources Corporation (better known as ENRC, largely based in Kazakhstan, but with head office in London) and to United Arab Emirates (UAE) group ETA Star.
At the concession award function, Mozambique Mineral Resources Minister Esperança Bias acknowledged that the country’s coal sector was going through a difficult time. However, she expressed confidence that the current trend of declining prices was only temporary and would change in the near future, the newspaper O País reported. “Investors continue to believe that Mozambique is a good investment destination,” she affirmed. “We want to encourage the whole mining sector, particularly the investors, to continue to believe that it is a good destination.”
Meanwhile, she noted that the sector will be involved in seeking solutions to increase the value of the coal that is not exported. Developing the domestic use of coal would create a balance between the home and export markets. She urged that the investors undertake their mining operations in a sustainable way which would ensure “a just return for the investor and a just return for the State which offers the resource for exploitation”.
The representatives of the two groups – José Dai of ENRC and Mubarak Hussein of ETA Star – both expressed the view that the efforts of their companies in developing Tete coal resources were praiseworthy given the difficulties posed by the low international coal prices. Both businesses believed that the market scenario would change for the better, sooner rather than later.
“[W]e don’t expect it to remain low for long,” Hussein told the Mozambique News Agency AIM. “We see this as a long term investment.”
AIM also reported that both the ENRC and ETA Star mines in Tete would be opencast operations. The ENRC concession covers 23 860 ha in the Cahora Bassa district, while ETA Star’s concession is for 4 000 ha, located some 40 km from Tete city.
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