THE COAL DEPOSITS OF MOZAMBIQUEP R ESENT ED BY A N DY L LOYD

D R AW I N G O N F F F P R ESE N TAT I O N S F RO M :-

• J O H N H A N COX ,

• LO P O VA SCO N CE L ES ,

• & GAV I N A N D R E W S.

OverviewRegional Geology

Karoo Basins of Mozambique• Early History

• Tectonic Setting

General Geology

Tete Province focus

Exploration learnings

Summary• So what’s in the ground

• Geology vs Economy

Elephants in the room or

Elephant country?

What do we mean by coalGeologically• Coal (from the Old English term col, which has meant "mineral of fossilized

carbon" since the 13th century) is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure. Coal is composed primarily of carbon along with variable quantities of other elements, chiefly hydrogen, sulphur, oxygen, and nitrogen.

Economically• That which can be mined for economic benefit.

And for Mozambique?• Which numbers are to be believed?

• What numbers are important?

Extractable Coal Economic Coal Un-economic Coal Geological Coal

Early HistoryFirst coal documented in 1859 by Richard Thornton on one of Dr Livingstone’s expeditions.

“Mr. Thornton stated that the coal, which was dug by natives from an outcropping seam on the bank of the River Muntizi, showed no tendency to cake; was free-burning; contained very little sulphur or iron although a large proportion of ash along with a small amount of gaseous matter “

Early geological investigations in the area were undertaken by Guyot (1882), Lapierre (1883), Zeiller (1883), Kuss (1884) and Potonié (1899). These authors mainly described the lithostratigraphy of coal bearing seams in the lower part of the Karoo Supergroup around Moatize.

Commercial mining in the Moatize Coalfield commenced in the early 1900s on a small scale.

Regional Geology

Extensional Tectonic Setting

Karoo Basins of Mozambique

Metangula Coal Field

~340

m

Tete Province

Chicoa – Mecúcoè

Sanagoe - Mefidizi

Moatize

Basement Contact

Vúzi Formation - Tillites

Moatize Formation

Chipanga – The 1st thick coal

Matinde Formation

Cadzi Formation

Productive Sequence Outcrop

Facing East

Possible Chipanga Tillites

Low angle faults – possibly 100m’s of throw

Channel Roof

Building a Facies model

• Re-logging old core

• Integrating with Geophysics

• Looking for geological fundamentals

Just Productive Series coal?Coal Outcrop in

Matinde Formation

Coal development in the tillites

Pro

du

ctiv

e

Mat

ind

e

Up

per

ICVL’s Zambeze Geology

A

A

B

B

C

C

Faulting on Macro and Micro scale

Geology –D Seam (Upper Chipanga)

View of North wall and D-Seam

Erosional “roof” contact

Fining up sequence of a migrating channel

Resulting in a thinner coal seam

Channel 1 Channel 2

Coal Bearing Unit

Lachelt (2004)

VALE (2009)

Moatize Sections

Generalised section through Moatize Basin

Gavin Andrews, 2014

Intrusives

Coal Seams

Drilling Challenges

Productive Sequence – formational Cartoon – ICVL Seam names.

A

B

C

D

E

F

G

H

I

J

Chipanga

Palaeontology

VertebrariaParacalamites Glossopteris

Palynology

PalynologyProtohaploxypinus-Vittatina-Guttulapollenites-

Lueckisporites Sub-Assemblage

Vu

zi

Pro

du

ctiv

eL

ow

er M

atin

de

Up

per

Matin

de

Converting stratigraphy to time

MUCANHA-VÚZI SANÂNGOÈ MOATIZE

~340

m

~200

m

~75

m (

?)

Metangula

~340

m

Coal Type log comparison

Back to BasicsGeology Fundamentals

Sedimentary units

Facies Changes

Data and Model consolidation

Geology Model

Stratigraphy

Coal Analyses

Data

Conventional and RTCM current thinking

B – Sousa Pinto

C – Chipanga

E – Grande Falesia

D – Bananeiras

On the ground…Coal Outcrop in

Matinde Formation

Coal development in the tillites

946 GeologyGeology Model

Stratigraphy

Coal Analyses

Data

Geology – Benga D Seam

Channel 1 Channel 2

Coal Bearing Unit

Geology Model

Stratigraphy

Coal Analyses

Data

Moatize and Minjova - underlying basin structure

Basement

Karoo - Uplifted Basement

Karoo

Post Karoo Intrusion

Benga

Moatize

Zambeze

945

Geology Model

Stratigraphy

Coal Analyses

Data

Strong evidence of syn-depositional and post-depositional faultingComplex basin structure

Textural MappingGeology Model

Stratigraphy

Coal Analyses

Data

Conventional View Enhanced Imagery

Type log for the Moatize and Matinde formations

1.3

km

Fluvial River channel system?Discordant

lenses

Marsh

Marsh system with thick (approx. 20-30m) coal

packages consisting of interbanded coal and

mudstone. Sandstone partings commonly display

coarsening up sequences.

Thicker upper

seams

River Channel

and Marsh

Transition zone between the underlying river

channel system with a series of abandoned

channels and the overlying marsh system with

thick mudstone dominated packages.

Discordant

lenses N+

FluvialRiver channel system with a series of abandoned

channels. Seams are less correlatable.J,K,L,M

H,I

F,G

E

D

C

B

A

Carb

on

ifero

us

Vu

zi

Fm

.

Glacial Glacial till deposited by melting glaciers.

Meso

Pro

tero

zo

ic

Ste

nia

n

Intrusive

The Tete Complex is the basement rock

consisting of serpentinised gabbro; the basement

includes intrusive stocks and plutons.

Depositional ProcessCoals

ContainedFormation Stratigraphy

Pala

eo

zo

ic

Fluvial

Era Period Super-group GroupDepositional

Environment

Mo

ati

ze F

m.

Perm

ian

Karo

o

Lo

wer

Karo

o

Post Glacial

Post Glacial outwash fans and channels. Lake

and marsh system at top of sequence containing

C-seam.

River channel system with correlatable seams.

Braided DeltaBraided delta system with interchannel coal

formation.

Mati

nd

e F

m.

Geology Model

Stratigraphy

Coal Analyses

Data

945 Sedimentary surfaces –improving seam correlation

Geology Model

Stratigraphy

Coal Analyses

Data

Basin fill directionsGeology Model

Stratigraphy

Coal Analyses

Data

Hiatus’s with

coal erosion

Ash chemistry variationsGeology Model

Stratigraphy

Coal Analyses

Data

Benga & 945L Geology

945 section

100m

500m

945 section

100m

500m

C Seam

500m

Coal CharacteristicsBenga

945

Seams

Yield Comparison – Ply’s 1.45SG

C

C

C

E

E

E

Seam comparison – VM & CCC Yield E

D

C

C – seam variogram ranking

Benga - Ply by ply CCC yield variation

C1

C4

C3

C2

Benga – C Seam

945L plys by maceral

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

C1 C2 C3 C4 D1 D2 D3 D4 D5 E1 E2 E3 E4 F0 F1 G1 G2 G3 H1 H2 I L M1 M2 M3 N1 N2 O P Q S1 S2 S3 S4 V1 V2 V3

% C

om

po

siti

on

Average of Vitrinite Average of Exinite_Liptinite Average of Semifusinite_React

Average of Semifusinite_Inert Average of Fusinite_Secretinite

10

15

20

25

30

35

5

40

wash_145_vm_ad_D

A5

2

B1

1

B1

2

B2

B3

B4

B5

1

B5

2

B6

C1

C2

C3

C4

D0

D1

D2

D3

D4

D5

E1

E2

E3

E4

EL

F0

F1

F2

1

F2

2

G1

G2

G3

H1

H2 I

J1

1

J1

2

J1

3

J1

4

J1

5

J2

1

J2

2

J3

1

J3

2

J3

3

K0

K1

1

K1

2

K2 L

M1

M2

M3

N1

N2 O P

P1

P2 Q

RR

1

RR

2 S

S1

S2

S3

S4

T1

T2

T3 U

V1

V2

V3

V4

V5

W1

W2

W3

X1

X2

X3

X4

X5 Y Z

Plys and Coal Quality – 1.45SG VM%

Vuzi Moatize Lower Matinde Upper Matinde

Hard Coking Coal

Plys and Ash Chemistry – TS%

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

0.4

2.2

wash_145_ts_ad_D

A52

B11

B12

B2

B3

B4

B51

B52

B6

C1

C2

C3

C4

D0

D1

D2

D3

D4

D5

E1

E2

E3

E4

EL

F0

F1

F21

F22

G1

G2

G3

H1

H2 I

J11

J12

J13

J14

J15

J21

J22

J31

J32

J33

K0

K11

K12

K2 L

M1

M2

M3

N1

N2 O P

P1

P2 Q

RR

1

RR

2 S

S1

S2

S3

S4

T1

T2

T3 U V1

V2

V3

V4

V5

W1

W2

W3

X1

X2

X3

X4

X5 Y Z

<1% Sulphur

Vuzi Moatize Lower Matinde Upper Matinde

Plys and Ash Chemistry – P%

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

-0.05

0.4

wash_145_p_ad_D

A52

B11

B12

B2

B3

B4

B51

B52

B6

C1

C2

C3

C4

D0

D1

D2

D3

D4

D5

E1

E2

E3

E4

EL

F0

F1

F21

F22

G1

G2

G3

H1

H2 I

J11

J12

J13

J14

J15

J21

J22

J31

J32

J33

K0

K11

K12

K2 L

M1

M2

M3

N1

N2 O P

P1

P2 Q

RR

1

RR

2 S

S1

S2

S3

S4

T1

T2

No

vali

d d

ata

T3

No

vali

d d

ata

U V1

V2

V3

V4

No

vali

d d

ata

V5

W1

W2

W3

X1

X2

X3

X4

X5 Y Z

<0.07% Phos

Vuzi Moatize Lower Matinde Upper Matinde

Benga Qualities – Spatial view

Resources

Geology of RTCM Licenses

Benga

Zambeze

Coal Type log• Up to 60 coal seams in the basin

(seam >1m)

• Seams thickness’s up to 90m

• Interburdens average 40-50m

• Coal characteristics• Sulphur – 1%

• Phos – 0.07%

• Vols – 20-35%

• Coke Yields – 5-60%

• Rank – 0.8-1.7

• Additional Thermal Yields – 10-30%

• Potential resources• Faulted

• Seams show varying continuity

• Intrusions become more prevalent to the east

Vu

zi

Pro

du

cti

ve

Lo

we

r M

ati

nd

eU

pp

er

Ma

tin

de

ICVL Zambeze

ICVL Benga Vale

ICVL Tete East

Eta Star

Cahora Bassa

P%

S%

Fluvial River channel system?Discordant

lenses

Marsh

Marsh system with thick (approx. 20-30m) coal

packages consisting of interbanded coal and

mudstone. Sandstone partings commonly display

coarsening up sequences.

Thicker upper

seams0.03 0.9

River Channel

and Marsh

Transition zone between the underlying river

channel system with a series of abandoned

channels and the overlying marsh system with

thick mudstone dominated packages.

Discordant

lenses N+0.02 1.1

FluvialRiver channel system with a series of abandoned

channels. Seams are less correlatable.J,K,L,M 0.01 1.0

H,I 0.08 0.9

F,G 0.06 0.8

E 0.08 0.8

D 0.08 0.9

C 0.11 0.7

B 0.01 0.9

A 0.00 1.3

Carb

on

ifero

us

Vu

zi

Fm

.

Glacial Glacial till deposited by melting glaciers.

Meso

Pro

tero

zo

ic

Ste

nia

n

Intrusive

The Tete Complex is the basement rock

consisting of serpentinised gabbro; the basement

includes intrusive stocks and plutons.

Mati

nd

e F

m.

Post Glacial outwash fans and channels. Lake

and marsh system at top of sequence containing

C-seam.

River channel system with correlatable seams.

Braided DeltaBraided delta system with interchannel coal

formation.

Pala

eo

zo

ic

Fluvial

Era PeriodSuper-

groupGroup

Depositional

Environment

Mo

ati

ze F

m.

Perm

ian

Karo

o

Lo

wer

Karo

o

Post Glacial

Depositional ProcessCoals

ContainedFormation Stratigraphy

Coal Characteristics

Product Coal

0

10

20

30

40

50

60

70

1.3 1.35 1.4 1.45 1.5 1.55 1.6 1.65 1.7 1.75 1.8

%

WHOLE SEAM DENSITY (SG)

Schematic of Coal Seams and Yield

% of Seams in Basin Coking Coal yield

What about the coal, are they seams and do they have ply´s?

Coking, Thermal, DomesticWhat are the different types of coal?

Vitrinite bands in mixtures of bright to dull coals within bands of siltstone and mudstone.

Coking Coal – Thermal Coal - Discard

The finer you go the more coking coal you get.

It´s a question of liberation and processing efficiency – more from Mark Cresswell later.

Properties of Mozambiquan coalIn general, the Mozambican Permian coals are:• Rank: Bituminous (from high to low volatile bituminous) coals, occasionally

anthracitic

• Type: Vitrinite dominant, Very low Liptinite content,

• Ash yield : generally high,

• Minerals are finely intergrown with the organic matrix, thereby posing difficulties in liberation during beneficiation

Petrography• Dominance of vitrinite; Low content of liptinite (Mucanha-Vúzi) or almost

absence (Moatize-Minjova-Mutarara).

• References to the petrography of coals from other regions were found only for Metangula coals:

• Chipanga Seam (Benga): V content of 72% (Top), 77 & 78% (Middle) 72 & 79% (Bottom)

• Mineral-rich (28% - 48%);

• Vitrinite varying from 36% to 51%;

• Liptinite in the range 2% to 3%

Coal QualitiesMoatize: • increase in rank with depth: from 1,28% in Grande Falésia (Bituminous B) to

1,51% in S. Pinto (Bituminous A).

• %VR varies from 1,16% in Top Chipanga Seam to 1,27-1,29% in Middle Chipanga and 1,27-1,37 in Bottom Chipanga, i.e., increases with depth.

Minjova:

• %VR ranging between 1,36-1,43% - MVB (or Bituminous B) to these coals

Mucanha-Vúzi:

• lower rank than Moatize, %VR that varies between 1,00-1,10%, approximate border between HVB-MVB (Bituminous B).

Mutarara:

• %VR between 1,93-3,86%, showing an anthracitic stage, some coal in LVB (many dolerite intrusions)

Metangula:

• No information available on reflectance of coals from the Basin. Reports refer to Bituminous C-D

http://portals.flexicadastre.com/mozambique/en/

Active exploration licences @20th July 2015

Exploration FocusVale

ICVL

Minas de Revuboé

Beacon Hill

Ncondezi

JSPL

ENRC

JSW

ETA Star

Midwest

Coal of India Limited

KingHo

Various Private Companies

Resources and ReservesLack of reliable numbers fail to illustrate the real situation.

The Mining Directorate of Mozambique (DNM, 2012) compiled a table of coal reserves (JORC) with the information provided by the coal companies and with more recent updates:

TOTAL of 29,342 Mt, • Measured/Indicated – 11,924 Mt• Inferred – 17,248 Mt

Notes• Numbers apply to 12 licenses only from Moatize-Ncondézi-Mutarara & Sanângoè-

Mefidézi• Chicôa-Mecúcoè: CAMEC (2009) refers to 3,6 Bt of coal reserves (included in

Sanângoè-Mefidézi figures• Niassa Province, no information

Data originally presented by Lopo Vasconceles in 2014

How much “coal” is there in Mozambique??• Possibly >30Bt of Geological Coal • Moatize (Vale) – >4Bt

• ICVL – >10Bt

• Minas de Revuboé – 1Bt

• ETA Star – 2Bt

• Jindal – 0.7Bt

• KingHo – 0.5Bt

• ENRC – 3Bt

• How much is extractable?• Yield – 30%

• Interburdens – 40-50m

• How Deep?

• At current coal prices?

• At current Infrastructure costs?

Extractable Coal

Economic Coal

Un-economic Coal

Geological Coal30Bt

??Bt

Reality Check – Cost of product

Infrastructure

Rail Opex

Rail Fees

Port Costs

Capex

Mining

Waste Mining

Coal Mining

CHPP

Rail load out

Capex

Royalties

Taxes

Comparable to Global Average?

Cost components in Coal Mining

Waste Mining

Coal Mining

CHPP

Rail Costs

Rail Fees

Port Costs

Current Coal Price

3 year average

Coal Price

CostPit to Port

30Bt of Coal – 5% Economic

Zoom o rightExpanded on right

30Bt of Coal – 15% Economic

Expanded on right

30Bt of Coal – 25% Economic

Zoom on ightExpanded on right

Elephants – “country” rather than “room”Significant resources – multiple Bt resources.

But – costs structures need to be addressed.

Mozambique Coal is part of the Southern African Karoo system, multiple mines tackle similar challenges – learn from them.

There is now technical expertise in coal mining in Mozambique, it should be utilised.

Going forwards – unlocking value needs:-• The right people

• The right balance of risk – smart rather than prescriptive

• The right expertise

• Honour the geology

• Understand the products and markets

What does this mean for Mozambique?Coal resource base changes on daily basis – but the geological coal does not.

Mozambique Factors• Mining Costs

• Infrastructure

Global Factors• Coal Price

The Moatize basin has the potential to produce a large percentage of the world’s Coking coal, but only if the current cost regime is reduced

and the coal price recovers.