Negotiations under way for Benga mine contract extension

Contract mining company MCC is in negotiations with mining consortium Indian Coal Ventures Limited (ICVL) to continue providing mining services or a mining solution, for ICVL’s Benga mine, in Tete, Mozambique, as its current contract expires in December.

MCC, the contract mining and plant rental division of JSE-listed Eqstra, has been responsible for mining at Benga since April 2010.

MCC CEO Justin Colling tells Mining Weekly that, despite the challenges associated with operating the mine, the company is committed to mitigating the conditions that render the mine profitless for the client, though he adds that most of the challenges stem from global commodity prices.

“Furthermore, we are trying to keep the project sustainable because there is no point in our part of the project being sustainable when our client, [ICVL], is not sustainable or vice versa,” he details.

Coal prices have been at record lows for months and Colling says this has had a significant impact on the mine’s productivity.

He explains that the costs of transporting the coal to port in Beira, for processing in India, are also high, but notes that the contractor’s work scope ends with the mining, whereas ICVL is responsible for washing and transporting the coal.

Further, Colling states that the heavy rains during the rainy season in Mozambique led to the contractor incurring additional costs, as extensive dewatering and the rebuilding of roads and other infrastructure are required after heavy rains.

However, he says, despite these challenges, Mozambique officials are willing to engage on how to simplify mining in the country and find solutions. “From an investment point of view, officials are helpful and are genuinely willing to engage and [try to] understand the conditions and challenges.”

Meanwhile, as training and empowerment are key priorities, MCC has invested a lot in the establishment of a training facility with simulators for the Benga project, as many workers at the project have not been exposed to mining activities and the type of operating equipment similar to those used at the mine.

MCC currently has about 500 workers at the Benga mine, with about 86% being Mozambican. Colling explains that, throughout the company’s work schedule at the mine, it brought in international experts in various fields of mining to train locals in best operating practices.

“Our investment includes training the workers because, ultimately, we want to empower them . . . to run and operate the mine. We have also invested in creating job opportunities for the locals,” he says.

In addition to its team working on the Benga project, MCC also has a large fleet of equipment at various sites in Mozambique provided by its plant hire business unit, which is mostly used for infrastructure development projects at coal, gemstones, iron and quarrying plants.
Colling concludes that MCC is also in talks with various miners in the Tete region to enhance collaboration and growth in Mozambique.