Coal India Africa hope suffers setback

Calcutta, Aug. 29: Coal India has surrendered its prospecting licences in Mozambique in Africa because of a lack of opportunity for commercial exploitation.

The public sector miner, through its subsidiary Coal India Africana Limitada, had acquired the licences for mining in August 2009, covering an area of 224 square kilometres (sq km).

However, 170 sq km did not have any coal layer till a depth of 500 metres and was surrendered to the Mozambique government. The remaining 54 sq km was retained and the licence was valid till August 2019.

A study to analyse the commercial viability revealed that it was technically not feasible to do mining in the area.

"The Coal India board accorded its approval for surrender of prospecting licence numbers 3450L and 3451L of CIAL to the government of Mozambique. Pursuant to this decision, applications for complete surrender of licences have been submitted to the National Institute of Mines, ministry of mineral resources and energy, government of Mozambique," Coal India said in its annual report and accounts 2015-16.

Company sources said the samples sent from Mozambique after exploratory drilling showed it would be difficult to undertake commercial exploitation.

"So, the decision was taken for complete surrender of the licences. But efforts are on to develop coal assets in South Africa," a senior company official said.

Coal India's board has approved the signing of a pact with African Exploration Mining & Finance Corporation SOC Ltd, owned by the South African government, for the acquisition of coal mines.

According to observers, Coal India's acquisition of prospecting licence area in Mozambique came at a time when there was a rush to buy coal assets in Africa.

Unlike India where the Geological Survey of India undertakes detailed study on mineral assets, there was little information on the availability of coal in the areas that Coal India had obtained.

Coal India Ltd