11 February 2013

Mozambique: Beacon Hill Receives Sena Line Quota

Maputo — The London-based mining company Beacon Hill Resources on Monday announced that it has reached an agreement with Mozambique’s publicly owned ports and rail company, CFM, which will enable it to transport half a million tonnes of coal per year along the Sena rail line.

Beacon Hill is the owner of the open cast coal mine Minas de Moatize in in the western province of Tete. Until now it has been transporting its coal to the port in Beira by truck, and on Christmas Eve its second trial shipment of 18,576 tonnes of thermal coal left Beira Port. But as from April it will be able to move the coal to the port along the 580 kilometre railway line.

This will enable the company to begin exporting coking coal using two locomotives and 42 wagons.

According to the managing director of Beacon Hill, Rowan Karstel, “this is a quantum step for Minas Moatize Limitada and is the key to successfully exporting coking coal economically out of Tete province".

Beacon Hill recently announced that it has increased by almost a third the estimated reserves of coking coal at Minas de Moatize.

The company is planning to increase production to 2.8 million tonnes per annum by the end of this year, and will focus on mining the high value coking coal that is used in steel production.

Like all the coal companies in the Moatize Basin, the expansion at Beacon Hill is dependent upon a phenomenal increase in the capacity to transport the coal.

Following several delays, the Sena Line is nearing the completion of a 60 million US dollar upgrade that will increase its capacity to 6.5 million tonnes per annum. But this will be nowhere near enough to cope with the phenomenal demand (particularly from the Brazilian mining giant Vale and the London-based mining company Rio Tinto).

Independent experts believe that over the next decade coal exports from the Zambezi coal basin by several companies could reach 100 million tonnes per year, making Mozambique one of the world’s largest coal exporters.

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