NRZ, Coal miners in transportation agreement

Coal miners have engaged the National Railway of Zimbabwe (NRZ) over the transportation of the fuel to Mozambique ports as they eye export to China, officials said.

Lack of capacity by NRZ, coupled with high rail costs was making exports to the world’s largest consumer of the fuel unviable. But an agreement has been reached with the national railway operator to “move the commodity competitively.”

Coal miners intend to export, both power and coking coal to China via Beira ports.

Power coal is used for power generation while coking coal is used to make coke, used in stainless steel making.

“There is an agreement and we are hoping to operationalize it during the course of the year, but there are no specific time frames yet,” one official, privy to the development told this publication.

While Coal Producers Association chairman Linos Masimura could not be drawn to provide more details citing confidentiality issues around the matter, he confirmed that “we have a solution that we are working on and we are in the process of implementing the solutions that we have identified.”

The global energy crisis resulting from Russia’s war in Ukraine drove up the demand for coal and prices and the commodity was the best performer after surging 157 percent last year.

Coal prices had started rising even before the conflict as some European countries switched away from expensive natural gas to coal, despite global commitments to move away from the polluting mineral.

However, prices have been falling, with the benchmark price averaging US$135,47 per tonne in the year to date, compared with a benchmark average of US$270,87 per tonne in 2022.

Following a milder winter in Europe and softer gas prices, European coal and gas stocks continued to increase and this has resulted in the redirection of coal volumes to Asia.

This added supply to Asian markets while coal from Russia also continued to flow into the region at discounts.-ebusinessweekly