Jindal sees first Mozambique coal exports by Jan

MAPUTO Tue Nov 20, 2012 9:01pm IST

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MAPUTO (Reuters) - Jindal Power & Steel (JNSP.NS) has started producing coal at its mine in Mozambique this month, with first exports expected by January next year, the company's country head for Mozambique said at an industry conference on Tuesday.

The company initially plans to produce and ship 1.3 million tonnes of coal, ramping up to 10 million tonnes over three to four years, with potential to double that in the future.

"Production has already started. We expect our first shipment in the next few months, possibly by January," Manoj Gupta told a Coaltrans conference in Maputo.

The mine will produce both coking coal and thermal coal.

The company's mine is not linked to the Sena railway line which Vale (VALE5.SA) and Rio Tinto (RIO.AX)(RIO.L) are using to transport coal to the port at Beira, so Jindal plans to use trucks over 100 km (60 miles) to link up with the Sena line.

The refurbishment of the Sena line to handle 6.5 million tonnes of coal a year has been delayed, forcing Vale to curtail production and exports this year.

There are plans to upgrade the line further to eventually carry up to 18 million tonnes, but critics wonder if this will happen any time soon given already major delays to the first phase of the project.

Mozambique is a hot new destination for coal producers but the poor state infrastructure in a country that remains dirt poor despite rapid economic growth in recent years remains an obstacle to developing the industry.

(Reporting by Agnieszka Flak and Marina Lopes; Editing by Ed Stoddard)

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