The piece “Market hiccups choke Eland Coal operations” featured below was initially published in Malawi’s Mining Review Issue Number 28 2015 that is circulating this August 2015.
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.
Market hiccups choke Eland Coal operations
- Firm feels heat of Tanzania’s ban of coal imports
By Deborah Manda
Coal miner, Eland Coal Mines, says lack of a stable and reliable market in the wake of Tanzania’s ban of coal imports is affecting its operations.
Managing Director of Eland Coal Mines, Mr. Biswick Kaswaswa, tells Mining Review that though the company is able to produce large quantities of coal at its Mwabulambo Coal Mine in Karonga, markets for the product have become scarce as the company is no longer exporting to its Tanzanian customers.
In the past, we used to export our coal to Mbeya Cement Company in Tanzania but now it is two years since we stopped exporting due to the policy the Tanzania Government embraced of banning the import of coal opting to use their locally produced coal,
He says in consequence, Eland is endeavoring to establish itself on the local market which is difficult because of transportation costs since most of the buyers are based in the commercial city, Blantyre which is a bit far from the mine.
Kaswaswa, therefore, says companies in the South have resorted to import coal from Moatize Coalfield in Mozambique, which is closer to their operational bases in Blantyre.
Transportation of coal from Karonga to other regions is very expensive thereby restricting us to sell our coal mainly in the Northern Region,
He, therefore, urges the government to emulate the example of Tanzania to protect the local coal industry, which is one of the biggest employers for the country, from collapsing.
Meanwhile, Eland has appealed to the government to assist it in relocating the communities at the mining site.
It is important that we sit down with the government to iron out compensation issues for the members of the community. When the government does not say anything about these issues, it becomes difficult for companies to decide on their own how much to disperse to the people being displaced due mining activities happening in their area,
The Mwabulambo coalfield is estimated to have 50 million metric tonnes of coal.
Due to long distance from the national power grid, Eland uses diesel for its operations including processing of coal.
Kaswaswa says such a situation affects the operations of the company as use of diesel is more expensive than power from the Electricity Supply Corporation of Malawi (Escom) grid.
Another coal miner, Intra Energy also complained of cheap imported coal flooding the Malawi market and asked the government to follow Tanzania’s example by taking necessary action to save the local coal industry.
State President His Excellency Arthur Peter Mutharika pledged to protect the country’s investors “physically and fiscally” in his address at the recently held Malawi Investment Forum.