8 August 2014

Mozambique: Mining Contract Signed With Kenyan Group

Maputo — The Mozambican government and the company Sol Mineracao Mocambique, a wholly owned subsidiary of the Kenyan group Sunflag, signed a mining exploration contract in Maputo on Thursday

Under this contract, signed by the Minister of Mineral Resources, Esperanca Bias, and by the general director of Sol Mineracao, Ravibhusan Bhardwej, the company will invest 222.8 million US dollars in coal mining in Mutarara district in the western province of Tete. The contract has the duration of 25 years.

Immediately after the signing ceremony, Bias admitted that the price of coal on the world market is currently very low, but she hoped that the situation would improve.

“For our part, as the government, we will continue to provide the support necessary so that the mine can be successful”, she said. “The signing of this contract is an indication of confidence in Mozambique”.

Sol Mineracao hopes to mine about five million tonnes of coal a year and to employ about 600 people. The company has already spent around six million dollars in the exploratory phase.

The viability studies show coal reserves in the concession area of 115.46 million tonnes. But the company's forecast is that only 44.9 million tonnes can be sold - 17.3 million tonnes of coking coal, and 27.6 million tonnes of thermal coal.

The company expects to sell 0.8 million tonnes of coking coal and 1.2 million tonnes of thermal coal a year.

Bhardwej promised that the company will undertake various activiti4es of corporate social responsibility, including the construction of schools and health units, to drive the development of the local communities and improve the quality of life.

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