The piece “Malcoal suspends Nkhachira mining operations” featured below was initially published in Malawi’s Mining & Trade Review Issue Number 35 that is circulating this March 2016.
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.
Malcoal suspends Nkhachira mining operations
By Madalitso Charwita Mhango
ASX-listed Intra Energy Corporation has suspended coal mining operations at its Nkhachira mine in the northern region of Malawi.
CEO for Intra Energy Tarn Brereton says in the company’s activities report for the quarter ending December 2015 that Intra Energy, which owns the Nkhachira Coal Mine through its local subsidiary Malcoal, has ceased operations at the mine due to low sales.
Sales in Malawi remained low for the quarter as imports increased from Mozambique coal producers,
He decries what he terms increased Mozambique coal dumping into the Malawi market which, he says, has caused operating losses in the Malcoal mining operations.
The opening of Moatize Coal mine in Mozambique has prompted most of Malawian companies to start importing coal from Mozambique other than Malawi’s northern coalfields partly due to the distance factor as Blantyre, which hosts most of Malawi’s industries that utilize coal, is closer to Moatize.
Malcoal has also failed to export coal to nearby Tanzania as Malawi’s northern neighbor has imposed restrictions on coal imports and the development has resulted in the company having a huge stockpile of coal at its Nkhachira Mine.
Nonetheless, Intra Energy hopes to supply its coal to the Pamodzi Power Project, which it is developing at Chipoka in the lakeshore district of Salima.
The project is expected to supply 120MW of power to Malawi’s main grid as the Malawi Government is promoting investment by independent power producers to address the energy crisis that the country is facing.
Spokesperson for Energy Affairs at the Ministry of Natural Resources, Energy and Mining, Joseph Kalowekamo says the term sheet agreement with the Electricity Supply Corporation of Malawi (ESCOM) for the project will be signed soon as Escom is still looking at it.
Intra Energy is a dominant coal supplier to industrial energy users in Eastern Africa with a vision to become a leader in the development and operation of coal assets to provide energy security solutions and create wealth for its shareholders.
Besides the Pamodzi Power Project, the company is also a sponsor of Ngaka coal fired power project in Tanzania.
Currently, Malawi’s coal mining industry is growing slowly due to tough competition posed by increased imports of coal from Mozambique.
Another company, Eland Coal Mine, was also forced to suspend production at its Mabulabo Coal Mine in Mzimba due to similar market challenges.