Reports Leo Odera Omolo
REPORTS emerging from the Tanzanian capital, Dar Es Salam say an Australian firm Intra Energy Corporation {IEC} has started coal mining in Tanzanian coastline of Indian Ocean.
The work has started at Mbalawala Mine, Ngaka coalfield in Tanzania and is targeting both domestic and export thermal coal markets of Kenya, Mauritius and India.
The Tanzania government awarded the firm a mining license in August that allows it to provide domestic coal in Tanzania for power generation and coal export starting before the end of 2012.
The executive chairman of the firm Graeme Robertson was quoted last week by the local media houses as saying that starting this month they will produce between 120 and 500 kilo tones of coal per annum, going for between USD 80 and USD85 per tone on the domestic market.
The firm will also start producing 120 megawatts of coal fired electric power with target of 1,000 MW in 2013.
Robertson further stated that after 12 and 18 months, IEC plans to ramp-up coal production to as much as 3.5 metric tones per annum to support domestic power generation in addition to industrial sales of 0.5 metric tones per annum.
“The coal- fired powered stations could be constructed by IEC and a joint venture partner, or by the government. or a third parties with a specific energy-intensive project,” he said.
IEC said that until coal-fired power plants are constructed in the region, initial customers are likely to be East African industrial users such as cement manufacturers, who are currently using expensive imported coal or low-quality alternative products.
“IEC understands that at least two contracts have been signed, though the details are considered confidential,” said Robertson, adding that 1,000 tones of Seam Three bulk samples has been sent to Tanga Cement and Mbeya Cement for testing.
Tanzanian Minister for Energy and Minerals William Ngeleja disclosed that mining license was granted on August 22 after receipt of an Environmental Impact Statement and that the mine site and port infrastructure is under construction.
The Mbalawala Mine was officially opened to the community and local government on May 19 this year.
The IEC says it prefer to own and operate services that are critical to mining as opposed to out sourcing, including establishment of business units such as mining, geology and technical services, catering assaying and drilling.
The strategy, according to IEC, is to set up an “ integrated profit center” that can boost the local economy and allow internal control of costs and scheduling.
The Chairman of the Parliamentary Committee on Energy and Minerals January Makamba said investment in coal is a way to fight the persistent power deficit in the country.
“Countries like the US and the UK were dependant of coal, which drove them to development. So coal will bring significant progress to rescue Tanzania from darkness, “he added.
While Tanzania has a mineable reserve of 40-million tones of coal, about 250,000 tones of coal is imported from South Africa per year.
Meanwhile a report has revealed that East African coastline is increasingly attracting investors interests as a major natural gas hub following recent commercial discovery in Tanzania and Mozambique.
Mozambique is estimated to have over 6 trillion cubic feet {tcf} of gas while Tanzania has 7.5 trillion cubic feet of the resource.
Petroleum Development Consultants {PDC} said China, India and Japan are the potential export markets for liquefied natural gas {LNG} from Tanzania nd Mozambique once the infrastructure is in place.
“The interesting question is whether there will be a liquefaction plant in both Tanzania and Mozambique or whether a single shared location could be developed,” said PDC managing director David Aron.
He said natural gas from the Pande and Temane onshore fields in Mozambique is currently exported to South Africa while Tanzania gas, produced from offshore fields, is used primarily for power generation.
Toronto-listed Orca Exploration, through its subsidiary Pan-African Energy, is operator of the offshore Songo Songo gas field, jointly with Tanzania Petroleum Development Corporation {TPDC} and Bermuda’s Globleq.
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