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Mozambique coal-fired power plant receives government backing

World Coal,

The Government of Mozambique has approved the construction of the 600 MW coal-fired power plant in Moatize in the western province of Tete.

The US$ 1 billion project will be run by Acwa Power Moatize Termoelectrica SA, a consortium whose main shareholders are Acwa Power of Saudi Arabia, Vale of Brazil and Mitsui of Japan. There are two Mozambican minority shareholders – the Whatana Investment Group and the publicly-owned electricity company EDM.

Story Mozambique looks to increase coal exports

The power plant will be built at the mouth of the opencast coal mine operated by Vale in Moatize. The higher grade coal, particularly the metallurgical coal, mined by Vale will be exported, while the lower grade coal will be used to generate electricity at the power plant.

Salvador Namburete, the minister of energy, told a media conference that the concession granted to Acwa is for 25 years, starting from the date when commercial operations begin. Construction of the power plant is expected to take three years.

The project will be built in two phases. The first phase will generate 300 MW with about 200 – 250 MW to be used by Vale itself to run its mining operations, while EDM will take the remaining power, adding it to the national electricity grid.

Namburete said that this would increase the availability of electricity in the country, which he put at about 2000 MW, mostly from the Cahora Bassa hydro-electric dam on the Zambezi river.

The minister explained that if the coal that was not exported was not used in a power plant, it would simply pile up alongside the mine “with all the environmental problems that would arise from that.”

He added that the project would likely create 1370 jobs – 1250 in the construction phase and 120 in operating the plant.

The participation of EDM and Whatana comply with the provisions of Mozambican law on public-private partnerships (PPPs), which state there must be a domestic interest in all such projects. “The law also states that, by the fifth year from the start of operations, 5% should be reserved for sale through the stock exchange to individual citizens. So this will happen during implementation of the project,” Namburete said. 

Edited from various sources by Sam Dodson

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