State-run Coal India has asked for alternative coal blocks from the Mozambique government since it did not find any commercially viable reserves in the block it was allotted a few years ago.
"We have asked for alternative blocks from the Mozambique government since there was no mineable coal in the one we were given," said, Sutirtha Bhattacharya, chairman at Coal India.
Another top executive at the company said condition of anonymity that Coal India has in fact surrendered the block and asked for a fresh allotment. "The government is yet to get back to us," the executive said.
CIL was allotted two exploratory blocks covering 224 sq km at Tete province in Mozambique in August 2009. Following this, it floated a wholly-owned subsidiary in Mozambique— Coal India Africana Limitada (CIAL)—for exploring the blocks.
Initially, the validity of Coal India's exploration licence was August 2014, but it was extended up to August 2019.
Coal India discovered that out of the 224 sq km of the total license area, 170 sq km had no 'coaly' horizon till a depth of 500 meter and it surrendered this block to the Mozambique government.
It, however, retained the remaining 54 sq km of area, for which the Mozambique government had issued a new licence that was valid till August 2019.
But Coal India later discovered that it was not feasible to do mining in this area as well. "Based on the results of various exploration activities in the licenses area 3450L and 3451L, the geological report has been prepared," the company said in its annual report. "A mineability study has been undertaken based on the findings of the geological report. The study revealed that it is technically not feasible to do mining in the license area of CIAL."
"Accordingly, the CIL board accorded its approval for surrender of the blocks to the Mozambique government. Pursuant to this decision, application for complete surrender of prospecting license has been submitted to the National Institute of Mines. The response of the government of Mozambique is awaited."
An official close to the development said Rio Tinto, the world's second largest mining company, has done extensive exploration work in some areas Mozambique and the best option for Coal India may be to take up the mines that International Coal Ventures Ltd (ICVL), aconsortium of some Indian staterun companies, had acquired from Rio Tinto. "ICVL mines are ready for development," the official said.