Beira port

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This article is part of the CoalSwarm coverage of Mozambique and coal
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Beira port is the longest established coal export port in Mozambique. The port, in Sofala province, is linked by the 660 kilometre-long Sena railway line to Moatize, Tete province, the current center of Mozambique's coal mining boom. The port's Beira coal terminal, opened in 2012 with an estimated annual capacity of 6 million tons, is currently used by Rio Tinto Coal Mozambique and Vale in conjunction with the Sena railway to process coal exports from their Tete province mining operations.

In 2014, the Indian company Essar Ports floated plans for an additional terminal, New Coal Terminal Beira (NCTB), which would have an estimated annual capacity of 10 million tons. In August 2017 Essar Ports announced it had signed a 30-year concession agreement with the Government of Mozambique to develop a new coal terminal by up to 20 million tonnes a year in two phases, each of 10 million tonnes per annum.[1]

However Beira faces numerous challenges. The railway line and the port have limited capacity, the port requires constant dredging and the railway line has been disrupted due to floods[2] and violent clashes between government troops and former civil war combatants. In addition, Beira port faces competition from Mozambique's newly constructed Nacala port, which has greater coal export capacity and is expected to begin operating in 2015.

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Project Details

  • Operator: CFM (Portos e Caminhos de Ferro de Moçambique)
  • Annual Capacity (Tons): 6 million
  • Status: Expanding

January 2015 Update

In April 2014, the Indian multinational conglomerate Essar Ports announced that it was seeking shareholder approval for a new $25 million coal terminal at Beira port, with an annual production capacity of 10 million tons.[3] The new terminal, officially known as NCTB (New Coal Terminal Beira), would be a joint venture between Essar Ports (70% stake) and CFM, Mozambique's port and rail authority (30% stake). In August 2014, the Mozambican government officially laid out the terms of its concession for the new terminal, which would be issued on a DBOOT (design, build, own, operate and transfer) basis. Under the terms of the agreement, Essar would have the right to design, build, and operate the terminal for a 30-year period before handing over management to the Mozambican government.[4]

In April 2014, operations on the Sena railway line between Moatize and Beira were temporarily suspended, after gunmen shot the driver of a coal train in the leg. Mozambique's Deputy Interior Minister Jose Mandra blamed the rebel group Renamo for the attack, although Renamo denied any responsibility for the incident.[5][6]

In 2015, commercial operations will begin at Vale's new coal export port in Nacala, which is linked to the Moatize coalfields by a new railway line. By 2017 Vale Moçambique projects that its coal exports from Nacala will greatly exceed those from Beira (18 million tons from Nacala vs only 4 million from Beira).[7]

Railway history

The Sena rail line was re-developed and re-opened in June 2010 to facilitate the export of coal from new export coal mines around Moatize in Mozambique. The reopened line has a capacity of five million tonnes of coal.[8] The development of the coal deposits around Moatize and Tete of Rio Tinto and Vale have been contingent on a substantial upgrading of export infrastructure. Rio Tinto's stage 1 Benga coal mine plans on exporting coal via the reopening of the Sena railway line from Moatize to the port of Beira and an upgrading of the port facilities.

Brazilian mining company Vale reported in August 2011 that it delivered its first coal by train from its Moatize mine project to the Beira port. Vale was the first of the major mining companies to start producing thermal and metallurgical coal from the Tete basin. The Moatize project will be able to produce up to 11 million tons of coal, 8.5 million tons of which will be metallurgical coal and 2.5 million tons thermal coal.[9]

Proposed expansion

The redevelopment of the 665 kilometer long Sena railway line was part-funded by a World Bank loan of $104.5 million, "with another $45 million under consideration" according to a 2009 news report. A transport adviser to the World Bank, Jose Chembeze, told Reuters that the Biera port could potentially handle approximately 12 to 15 million tonnes of coal per annum. Chembeze stated that a further upgrade of the railway to allow it to handle 12 million tonnes of coal a year was under consideration and that this would cost an additional $250-280 million.[10]

In a 2010 investor presentation Riversdale stated that the "Mozambique Government is planning for a new Beira coal terminal with 18-24mtpa of new capacity to be constructed (additional to refurbished capacity)". The company states that the expansion of Benga would be timed to coincide with this. Further expansion of coal exports from the Moatize area, the company flags, could require "double tracking, passing loops, signaling & bridge upgrade" on the Sena railway line.[11]

Railway alternatives for coal exports

However, there is uncertainty about the likelihood of further railway upgrades. Vale is currently developing Nacala Corridor project, a 912 kilometre long railway to connect the Moatize mine with a new coal export terminal at Nacala. The project involves upgrading 682 kilometres of existing railroad and building a new 230-kilometre section.[12] The railway line is proposed to cost $4.4 billion and be completed in the second half of 2014. The company has also commenced a US$2 billion expansion of the Moatize mine to provide an additional capacity of 11 million tonnes a year, doubling the mine output[13], which is scheduled to be completed in in the second half of 2015.

In July 2013 the Mozambique government is scheduled to select a winning bidder from six preferred bidders for the construction of a new 525 kilometre rail line from Tete province to Macuse and a new 25 million tonne a year multi-cargo port. The government wants the new port to be capable of being doubled in capacity. The bid winner will be required to fund the project, estimated to cost US$3 billion. Rio Tinto is one of the six preferred bidders though Transport Minister Paulo Zucula has rejected a push by Rio Tinto for "an exclusive line, just for Rio Tinto. Mozambique doesn't work on those principles".[14] (See Moatize to Macuse railway line.)

Floods and Security

In February 2013 flooding resulted in the railway being shut down for several weeks forcing Vale and Rio Tinto to suspend exports. The port of Beira also requires constant dredging to remain operational.[15]

Coal exports via the railway line have also been disrupted following violent clashes between the ruling Front for the Liberation of Mozambique (Frelimo) and its former civil war combatants, Renamo. The Sena railway runs near Renamo's stronghold in the Gorongosa area. In June 2013 Renamo threatened to block the railway line following government troops moving into the area near Beira Port following an attack on a government arms depot in which six soldiers were killed.[16][17] Following the clashes Rio Tinto stated that it had "paused our operations on the rail line while we assess the current situation in Mozambique."[18]

Articles and resources

References

  1. Essar Ports, "Essar Ports signs concession agreement with Mozambique government to develop new 20 MTPA coal terminal in Beira Port", Media Release, August 4, 2017.
  2. Agnieszka Flak and Marina Lopes, "Poor railways, ports put brake on Mozambique's coal rush", Reuters, April 16, 2013.
  3. "Essar Ports seeks shareholders’ approval to invest in Mozambique’s Beira coal terminal", The Hindu Business Line, April 1, 2014.
  4. " Moz government passes law for new Beira coal terminal", African Cargo News, August 4, 2014.
  5. "Mozambique: Renamo Attacks Train on Sena Line", allAfrica, April 2, 2014.
  6. "Moz: Tensions flare as Renamo denies attack on train line", Mail & Guardian, April 3, 2014.
  7. "Vale Moçambique plans to start exporting coal via port of Nacala-a-Velha in 2015", Macau Hub, March 14, 2014.
  8. Irma Venter, "Mozambique’s 5Mt/y Sena coal line requires 30 locos, 600 wagons", Engineering News, June 23, 2010.
  9. "Vale Mozambique Coal Reaches Port; Eyes Aug Export" WebWire, accessed August 11, 2011.
  10. "Mozambique coal rail line ready 2010-World Bank", Reuters, April 21, 2009.
  11. Steve Mallyon (Managing Director), "Investor Presentation", Maputpo, July 2010, page 22.
  12. Vale, "Railroads: Nacala Corridor", Vale website, accessed May 2013.
  13. Vale, [http://www.vale.com/EN/investors/investments/Capex/Capex/120312Capex2013_i.pdf "Vale: Capital and R&D Expenditures Budget of US$ 16.3 billion to 2013", Media Release, 3 December 2012.
  14. Agnieszka Flak, "Rio Tinto among main bidders for Mozambique rail project", Reuters, April 10, 2013.
  15. Agnieszka Flak and Marina Lopes, "Poor railways, ports put brake on Mozambique's coal rush", Reuters, April 16, 2013.
  16. "Mozambique's Renamo threatens to paralyse coal export line", Reuters, June 19, 2013.
  17. William Felimao, "Mozambique’s Renamo Threatens Rail Line Used by Rio, Vale", Bloomberg, June 19, 2013.
  18. "Rio suspends Mozambique coal exports over security fears", Reuters, June 26, 2013.

Related SourceWatch articles

External resources

  • CCFB, "Beira Rail Concession", Workshop on Large Project Finance, Maputo, Mozambique, February 7, 2008. (Powerpoint Presentation).

External articles