Despite Mozambique’s vision of becoming the world’s largest coal exporter, Indian consortium International Coal Ventures (ICVL) says it is making huge losses on its coal mining operations in the southern Africa country.
ICVL recently acquired three coal mines in Mozambique’s Tete province from mining giant Rio Tinto group but consortium officials say they are posting losses of US$35 for each ton of extracted coal.
Anil Chaudhary financial director of Steel Authority of India, part of the ICVL consortium, said: “Production costs at the Benga mine are currently US$165/166 per ton, while the sale price for that same ton is around $130.”
Poor infrastructure is blamed for high extraction costs with the country spending about US$50 billion on projects to access its coal reserves.
The southern African nation exported its first batch of coal in 2011 and but the mining sector contributes less than 5 per cent to the nation’s gross domestic product.