A coal terminal planned for construction at Mozambique’s Beira port could be a gateway for imports and exports from the landlocked countries of Zimbabwe, Zambia, the Democratic Republic of Congo, Malawi and Botswana, and could greatly boost coal exports to India.

Essar Ports CEO Tej Nargundkar says he is confident that the Beira terminal would be an outstanding coking coal terminal and would substantially grow Mozambique’s coking coal exports to India.

India-based Essar Ports signed a 30-year concession agreement with the government of Mozambique to develop the new coal terminal in a public–private partnership.

“The new coal terminal at Beira will be the closest evacuation facility for Mozambique’s coal reserves, [which are] estimated to be in excess of 23-billion tonnes,” Nargundkar told delegates at the IHS Markit South African Coal Export Conference, in Cape Town, last week.

He said the port was strategically located and was the closest Mozambique port to the country’s coal mining region, 580 km away. The terminal is expected to have a cargo handling capacity of 20-million tonnes a year.

Nargundkar also sees the distance from Beira to the coast of India as a distinct advantage.

“In nautical miles, it’s almost half the distance from Australia to India. It’s 3 420 km from Beira, compared with 6 956 km from Australia. Buyers would have a clear freight advantage in importing coal from Mozambique to the west and east coasts of India, compared with both Australia and South Africa,” Nargundkar told delegates.

India currently derives 85% of its coking coal imports from Australia.

“I think the terminal would primarily serve as a coking coal terminal, because India is a growing country in terms of its steel output. In India, 50% of our steel [takes] the blast furnace route, which requires coking coal.”

India’s crude steel production grew by 6.2% year-on-year to 101.28-million tonnes in 2017. The country’s Steel and Mines Ministry has asked the steel industry to double its production, with a production target of 30-million tonnes a year by 2030.

“I think Mozambique will become one of the big suppliers of coking coal to India. Mozambique’s coking coal usually sells at a discount, compared with [the] hard prime coking coal of Australia.”

Mozambique currently exports 40% of its coal to India, 30% to countries in the Far East, 25% to Europe and 5% to countries in other regions.

Essar Group completed all technical surveys for the terminal in 2016, signed the concession contract in February 2017 and followed up with port approval in July 2017.

It expects the terminal to be commissioned in January 2020.

The new terminal is expected to have a fully mechanised cargo handling system for unloading wagons, moving coal in the yard, stockpiling and loading onto vessels.

Nargundkar said the plan was to accommodate supermax-size vessels that are able to do transshipments for nine to ten months of the year. That would allow for 60 days of monsoons, bad weather and heavy swells.

Beira is an established port, with 12 operational berths, stretching over a total length of 1 994 m, excluding its [No 1] berth, which is used as a fishing harbour.

The new Port of Nacala-a-Velha, on the northern Mozambique coast, offers some competition for coal exports, but Nargundkar is confident that the Beira port is better located.