Hundreds out of work as coal mining grinds to a halt in Tete, Mozambique

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Hundreds out of work as coal mining grinds to a halt in Tete, Mozambique

2:08 CAT | 27 May 2016

At least three large coal mining company in Tete have suspended operations or are working at half capacity due to falling raw material prices in international markets, reports Notícias today

The situation has already resulted in hundreds of layoffs.

During his visit to Tete, President Filipe Nyusi heard from the companies in question – the Indian Venture Company Lda (ICVL), Minas de Moatize and Jindal. The president learned during a visit to Jindal facilities in Marara district that, as a consequence of falling prices, the company had laid off 250 workers, keeping on only 300 to maintain essential services.

Mhoje_nyusijindal_photo_jpg — Notícias / President of Mozambique Filipe Nyusi, during his visit to Jindal, located in Marara district, Tete province

The provincial director of mineral resources of Tete, Grácio Rosário, said that Jindal, an India-based company, has practically stopped all mining activities, leaving only processing, exports and administrative services functioning. “At this time, Jindal has stopped mining, but continues to process the coal which has already been extracted,” the provincial director said.

He said that almost all the province’s mining companies were operating below capacity, affecting not only jobs but state revenue from levies on production and personal income tax.

Jindal has a 20 thousand hectare concession area valid for 25 years with an export capacity of 850,000 tons per year. “All mining companies face the same difficulty and each will be holding up according to their capabilities. Vale, for example, has also lowered production because of the crisis,” Rosário said

Coal prices have been dropping dramatically since 2010, with the price of coke falling from US$300 to US$100 per ton and thermal coal selling currently for about US$60 per ton

In this scenario, one of the alternatives for thermal coal is the construction of coal-fired electricity generating plants, for which several projects had been presented to the government for evaluation, Rosário said.

“These are projects that were submitted for evaluation to extend the life of coal projects. There are new studies underway also linked to energy production,” he added.

Source: Notícias