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Macuze Railway Line: Lack of Funding Prevents Project from Getting off the Ground

Macuze Railway Line: Lack of Funding Prevents Project from Getting off the Ground

The 600-kilometre railway line between Moatize and Macuze brings the Moatize coal basin and the Indian Ocean closer together and costs 3.7 billion euros. Banks are hesitant to finance the project.

When, in 2013, TML won the Macuse Corridor concession to build a 600-kilometre line from Tete province to the Port of Macuse, it was far from imagining the future difficulties in obtaining financing to run it.

TML – Thai Moçambique Logística is 60 percent owned by ITD, 20 percent by the investment fund Codiza and 20 percent by CFM – Caminhos de Ferro de Moçambique, which is the public partner in what is after all a public-private partnership (PPP) with the Mozambican state. The Chinese, Japanese and Indians also competed for this concession, but in the end it was the Thais who were chosen by the Mozambican government.

The project is simple: a railway line built from scratch that would transport 2.7 million tons of coal per year, halving the cost of transporting each ton in comparison to the current alternative, which is the line from Moatize to Nacala, which is 920 kilometres long and, incidentally, is under concession to the Indian mining company Vulcan Resources, which has exclusive rights to it. Trains of 1900 metres, with 140 wagons, towed by 4500 HP locomotives, would carry 11,200 tonnes of coal on each journey (by way of comparison, the largest goods trains circulating in Portugal tow 2080 tonnes and reach 600 metres).

The Macuse Corridor would also create 1,800 jobs during construction and 350 in the operation phase.

“Almost 20 years ago, when this project began to be outlined, climate change was not as topical and important as it is today,” explains Mamed Latif, administrator of TML (concessionaire) and PCA of Codiza, himself a former railwayman from Caminhos de Ferro de Moçambique and with experience in railway signalling in Portugal. “But now, when we talk about coal, the banks practically hang up on us,” he laments.

“The point is that this product now considered cursed is still necessary for our lives and is in great demand all over the world. Coal is not only the thermal component designed to produce energy – and the world still needs low-cost energy; it is also needed to build steel, for industry, to make concrete and cement, for construction.” Mamed Latif does not question the need for the energy transition, but thinks that it is not in line with voluntarism and politically correct discourse that confronts a much more complex reality.

“For example, the cost of a kW based on coal (not counting carbon tax) is 0.06 euros, while solar energy costs 0.08 euros; but if it’s solar energy associated with batteries (which are needed to store energy), it costs 0.12 euros. The batteries contain lithium, but to get one tonne of lithium, you need to move many tonnes of earth, at the cost of a lot of energy and environmental costs”.

The project also faces a lack of sovereign guarantees from one of the partners, which is the government of Mozambique itself, as well as a lack of cargo commitments from the mining companies, themselves also subject to strong criticism from environmentalists.

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However, work has been done in the coal-based energy production sector, particularly in the energy efficiency of its burning, which has doubled thanks to recent technological advances. New techniques such as the gasification of coal instead of burning it also make it possible to substantially eliminate the release of CO2 into the atmosphere.

At this stage of the project, and with financing difficulties with the banks, TML is now trying to demonstrate that the Macuse Corridor is not only based on coal. From Moatize it is also possible to collect iron ore, copper, cobalt, containerised cargo and fuel, from neighbouring countries (Zambia, Zimbabwe, Malawi) to the Indian Ocean coast.

On top of it all, the Macuse Corridor can become greener and more sustainable. Mamed Latif says that this railway line will also support the agricultural and agro-industrial development of the fertile and extensive Zambezi River basin, in addition to allowing accessibility to the sea from Zimbabwe, Zambia and Malawi. It will also make it easier to carry out the Portucel/Navigator forestry project in the Mozambican provinces of Zambézia and Manica, as well as providing a connection to the Port of Macuse.

O Público


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