Cape Town: Eurasian Natural Resources PLC is developing a coal logistics corridor in northern Mozambique to ship coal from the coal-rich Tete Basin to the coast, to be completed by 2015, the company's general manager said Wednesday. The FTSE-100 miner is the lead developer of a logistics system that involves the construction of a 60-million-ton-a-year line, and a port at Nacala that is able to handle up to a similar amount of tonnage a year, Paul Craven told Dow Jones Newswires on the sideline of a mining Indaba conference here.
He said ENRC's port would be adjacent to Vale's port. It would have an initial nameplate capacity of 40 million tons a year with the capacity to handle up to 60 million tons. It could then be expanded to 100 million tons at a later date, he added.
Craven said the cost of developing the line would be cheaper than the $4 billion that Brazilian miner Vale SA is spending to develop its own 18 million-ton-a-year railway line to Nacala.
Craven said the railway would be wholly contained within Mozambique. ENRC evaluated an option to cut through Malawi to reach the coast but found that a wholly contained Mozambique option was not only shorter but cheaper. He said the Mozambique proposal was "technically less difficult" and the company would be using Australian and Canadian technology in order to develop the logistics system, which will be open to third parties.
ENRC is also developing the first of its 12 mining licenses in Tete. The first mining deposit, called the Estima project, is forecast to produce 20 million tons of coal a year by 2015-16 at a project cost of around $500 million. ENRC plans to increase Estima's output to between 30 million and 40 million tons by 2020.
Vale, Rio Tinto PLC, and other mining companies as well as steelmakers have flocked to the Tete basin to take part in what is expected to become one of the world's largest coking coal basins.
* Copyright © 2012 Dow Jones Newswires
