Skip to main content

Queensland Bauxite acquires Mozambique coal project

World Coal,

Queensland Bauxite has secured a further coal project in Mozambique that has a potential resource base of hundreds of millions of tonnes of coal.

The project is located 250 km from the Palma and Pembra ports, giving Queensland Bauxite useful access to existing infrastructure.

Although the project is still in its infancy, the company said it offered some very interesting blue sky upside, given the path created by Riversdale Mining before it was acquired by Rio Tinto in 2010.

The company is earning up to a 51% interest in Regius Coal, which has in turn signed an agreement to acquire 80% of License 4453L from Raimundo Azarias Ingles in return for funding development of the project.

The company said it believed there is potential to fast track production at the project, as there is relatively minimum overburden on the identified coal seams and the product could potentially transported to nearby ports via trucks at an economical price.

STORY Mozambique raises transport project costs

License 4453L covers 192 km2 and contains 99.9 km2 of Lower Karoo geology.

Historical drilling intersected 3 m coal seams within the top 40 m. There is also significant prospective at depth, which has yet to be tested.

Should the tenement contain a coal seam of bituminous to anthracite grade, as has been reported from previous drilling, the license may host mover 250 million t in situ coal.

This value is based on the total area that contains the carbonaceous unit, including the unit that has minimal overburden, as well as the area covered by conglomeratic sandstone.

The Karoo within the license is exposed within a very narrow basin bound by fault and partly covered by later Quaternary alluvium and colluvium.

The company said that Mozambique had been targeted because the country is well placed to supply coal – especially hard metallurgical coal – to emerging markets such as India and Brazil. Mozambique coal has an easy shipping route from Beira to India’s west coast coal ports from Maharashtra to Gujarat.

In October 2013, Queensland Bauxite signed a binding agreement with Regius Coal that gave the company the right to earn a 51% interest in Regius. Regius controls a number of prospective coal licenses in Mozambique.

Investor analysis

According to analysts at Proactive Investors, the potential of License 4453L “brings to mind echoes of Riversdale Mining, whose Mozambique metallurgical coal project drew the attention of Rio Tinto.”

Riversdale was purchased by Rio Tinto for £2.5 billion – after an initial offer of £2.2 billion was turned down.

Should the tenement contain a coal seam of bituminous to anthracite grade, as has been reported from the limited historical drilling (and assuming that the density of coal is consistent in the prospective area throughout the license and that there is a maximum geological loss of 30%), analysts believe the license may well host 262 million t in situ coal.

While this is not a resource, according to analysts, it is nonetheless likely to be an exploration target and further parallels can be drawn with Riversdale given the metallurgical coal potential.

Additionally, with relatively minimum overburden on the reported identified coal seams and the relative proximity to port, any product could be economically trucked to port. “So there is potential to fast-track development,” analysts said.

“Licence 4453L could well make Queensland Bauxite a Riversdale Mining mark two in the making and is now solidly on our radar,” Proactive Investors said. 

Edited from various sources by Sam Dodson

Read the article online at:

You might also like


Embed article link: (copy the HTML code below):