Imported coal threatens local mines’ future

 

Shiploads of coal from Mozambique have cast a shadow of uncertainty over the future of coal mines in the Northern Region, Business Review can reveal.

Secretary for Natural Resources, Energy and Mines Ben Botolo has said local mining companies are fast losing grip of the existing market as Vale Logistics’ newly-constructed railway line, which transverses the Southern Region from Kachasu in Chikwawa to Nkaya in Balaka, has lessened the cost of importing the fuel mineral from the neighbouring country.

Doomed for closure? Local coal mines are under threat
Doomed for closure? Local coal mines are under threat

The Brazilian mining company constructed the rail line to reduce the cost of hauling coal grains from the coalfields of Moatize on the eastern part of Mozambique to the Indian Ocean port of Nacala on the western end.

But Botolo said the race for foreign coal is taking a toll on mines in Rumphi and Karonga.

He said: “There is a general problem in the coal industry where the country is increasingly importing coal tax-free from Mozambique. We need to protect our coal mines, investors and the jobs at stake.

“Presently, we are already talking to our friends at the Ministry of Industry and Trade to see how we can control the influx of this cheap, low-grade coal which is getting into the country without paying tax.”

Botolo hinted at the potential closure of coalmines in Karonga, especially Malcoal at Kayerekera and Magnum at Mpata.

Fears of looming closure are also gaining sway in Mwaulambo where Eland Coal Mining has been extracting coal for almost seven years.

Mwaulambo residents, speaking last Friday at a community meeting jointly supported by Centre for Environmental Policy and Advocacy (Cepa), Livingstonia Synod’s Church and Society (CAS) and ActionAid, talked about water and air pollution as mining activity grinds to a near-halt.

Mines Department spokesperson Levy Undi said government has received no notice of closure from Eland Coal Mine and the mining firm’s director Leon Rademeyer, who is said to be abroad for holiday, did not respond to our questionnaire. n

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  1. Avatar

    In Tanzania there is an import ban on coal so that Coal users buy from local producers as a result the Malawian producers who are based in the north have hit hard apart from the influx of the imported coal.
    Government needs to do something,if the department of mines can compare there royalties for export between last year and this year ,they will note the reduction. Malawi cannot continue importing low-quallity products in the name of cheap transport costs. We are exporting jobs,taxes and other opportunities through imports of these.

    Mwanamveka and company please do something about this.

  2. Avatar

    The estimated coal consumption in Malawi is 8,000MT per month, while the combined production of local mines is around 5,000MT/month. In addition, coal consumers demand certain coal specification for their production purposes, because different boiler systems require certain coals. In great demand in Malawi are Washed Coal Peas 6mm-25mm, unfortunately, no Malawian coal mine has installed coal washing facilities (quite expensive), and in reality most coals produced in Malawi end up clogging boilers systems, require more coal volume for the same amount of heat required and therefore more expensive. It is also a well known fact that most Malawian coals come from the Livingstonia range of hill and most of that is required in the commercial factories in Blantyre. The average road distance is around 700km, while the road distance to Mozambican coal mines is only 235kms.

    Now that does not mean Malawi coal is not commercially viable. In a few years time we need to develop coal powered stations. The coal in the North is ideal for this, but the miners need to invest in adequate equipment. I have heard of a coal power plant destined for Chipoka/Salima – Why? The North has the coal and power can be produced there, cheaply because there will be no need to transport it. Maybe, what we need is to both justify our investments and design them properly. Kayelekera and other mines in the North need power, why not put a powerplant there?

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