“This project is at the state province in Mozambique, which is 110 to 120 kilometres from the rail line. Our mine was recently inaugurated by the honourable president Armando Guebuza, where out chairman of Jindal Steel and Power Naveen Jindal was also present,” Jindal Steel and Power managing director Manoj Gupta told CNBC Africa on Friday.
“The mine has obviously been developed with a 400pph dwarf plant, which is the first coal mine in the southern part of Zambezi. In Mozambique we have got another two mines, three mines in the north part of Zambezi river, but this is the first mine in the southern part of the Zambezi.”
The Chirodzi mine has estimated reserves of 1.2 billion tonnes of coal. Jindal Steel and Power is one of India’s major steel producers and also has a mining, power generation and infrastructure presence. Jindal Africa’s mining concession in Mozambique produces cooking and thermal coal.
Opposition party the Mozambican National Resistance (Renamo) had threatened the infrastructure of the Sena rail line earlier this year as a means of hurting the government. The Sena line is the only railway line out of Mozambique's coalfields. The threats also added to the delay in coal exportation.
“As per the infrastructure is concerned, they are the biggest challenges. The capacity of the rail line and the capacity of the port, these are the big issues. Despite the considerable progress, Mozambique’s government is making serious strides to remedy such issues by pushing forward various large-scale projects that include creating increasing port capabilities and a new railway line linking to the coal mining areas of the coast,” Gupta explained.
Major multinational companies also operating in the basin include Vale of Brazil and British-Australian company Rio Tinto. Earlier this week Rio Tinto suspended its operations for two weeks due to threats from Renamo.
“We don’t consider ourselves as a competitor with others. When there is a common understanding for the development of the infrastructure, we interact with each other through a coal association here in Mozambique, and in the various discussions which take place,” said Gupta.