Zimbabwe and other regional countries could benefit from cheaper fuel should a multi-million dollar energy deal in Mozambique take off, official reports have shown.
The Mozambique government recently signed a development agreement with Clean Carbon Industries LDA (CCI) to undertake a full feasibility study into the construction of a plant to produce 40 000 barrels of transport fuel and chemical by-products from lower grade coal in the Mozambique Tete Basin.
The Bankable Feasibility Study is expected to be completed by the end of 2014, paving way for construction to start in the first quarter of 2016.
“The government of Mozambique has first call on the first 20 000 barrels per day produced by the plant (Mozambique currently utilises approximately 17 000 bbls per day) leaving excess capacity to be exported to Tanzania, Malawi, Zambia, Botswana and other regional Sadc countries and/or be converted to chemical feedstock for export,” read part of the statement by CCI.
“The close proximity of the Tete basin to Malawi, Zimbabwe, and Tanzanian markets, should extensively reduce the transportation cost of fuel to these markets.”
The project will consume up to 17 million tonnes of coal per annum and will therefore make a large contribution to reducing environmental problems and costs associated with sequestrating waste coals in the basin.
CCI chairperson Arnold Pistorius said: “The project will deliver benefits for the entire sub-Saharan region and will generate new income streams for Mozambique as well as social benefits for local communities.”
Hugh Brown and Associates chairperson and CCI chief executive Hugh Brown said: “The realisation of this project is based on efficient conversion of low-cost feedstock to Syngas and liquids which are not directly linked to the oil price. Future feedstock availability and costs are therefore determined by known reserves of low-grade coal at predictable mining and preparation costs.”
