VIDEO – COALTRANS MOZAMBIQUE: Jindal in steel plant talks in Mozambique

Indian steel major Jindal is in talks with the Mozambican government about setting up an integrated steel plant close to its thermal and coking coal project in the Tete region of the country.

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A timeline for the integrated steel project is yet to be decided upon, but steel from the plant will be destined for the export market, Jindal’s Mozambique country head Manoj Gupta told Steel First on the sidelines of the Coaltrans Mozambique conference in Maputo on Tuesday November 20.

“It’s very early days,” said Gupta, adding that the steel mill project did not yet have a set budget.

Jindal is conducting exploration work in the coal-rich Tete region for iron ore reserves, with the prospective steel plant looking to capitalise on the region’s easy access to coal and cheap power.

The Indian steelmaker is set to start production from its 10 million tpy coalmine in Tete in November 2012, with first shipments scheduled for January 2013.

Gupta said the mine could expand capacity up to 20 million tpy.

Jindal is considering a number of different long-term infrastructure options for the transportation of coal from Tete to the coast. The project’s initial phase of production will be transported by road and rail.

Rail development projects are the key to the success of a number of coal projects located in the remote Tete region.

Brazilian mining major Vale said in October that the ramp up of the first phase of its Moatize coking coal mine in Tete had been constrained by transport issues.

Gupta said that Jindal believed that planned infrastructure projects, including new rail lines planned by Kazakh mining group ENRC and Vale, would be completed within schedule.

“We are 100% confident that the ports and rail planned will be built,” said Gupta. “Progress is slow, but this is because the government is doing a thorough job now so it doesn’t have to mend mistakes later.”