Mozambique: coal on Sena line

[John Ashworth]

Beacon Hill ‘confident’ of securing Sena rail allocation

Published: 9 October 2012 Bulk Materials International Online

AIM-listed Beacon Hill Resources has begun formal negotiations with Portos e Caminhos de Ferro de Moçambique (CFM) with respect to finalising an allocation on the Sena rail line, to transport coal from its Minas Moatize mine in Mozambique’s Tete province to the Port of Beira.

Beacon Hill said that negotiations are progressing well and that it is confident of securing an initial allocation by the end of the year.

CFM is currently in the process of finalising the upgrade of the Sena line to an initial capacity of 6.5 mtpa, which is anticipated to be completed by the end of November 2012.

Beacon Hill also announced that it has entered into a Memorandum of Understanding with a multinational group with Mozambican coal mining operations to jointly develop multi-user coal handling infrastructure along the Sena rail line including a rail loading facility outside the town of Moatize and the development of joint facilities at the Port of Beira.

Access to the Sena rail line, together with the use of this new infrastructure, will enable Minas Moatize to increase export volumes and to significantly lower operating costs, it said.

Beacon Hill currently has approximately 18,000t of coal at the Port of Beira awaiting shipment. Global Coke, an off-take partner, has recently nominated a vessel to receive their maiden shipment of coal from Minas Moatize, which is anticipated to arrive at the Port of Beira in the last week of October 2012.

"We continue to make progress with the development of our logistics infrastructure,” said Justin Lewis, chairman of Beacon Hill.

“Having commenced formal discussions with CFM we remain confident of formally attaining an allocation to the Sena rail line this year to transport coal from our producing Minas Moatize Coal Project. In parallel, I am very pleased to have entered into a strategic partnership to jointly develop multi-user coal handling infrastructure.

“Pending using the Sena rail line the Group continues to transport coal by truck from Moatize to the Port of Beira and we continue to utilise our existing infrastructure, including a dedicated stockpile area within the port. We look forward to Global Coke, our off-take partner, taking their first shipment of coal later this month," Lewis said.