Mozambique, Malawi sign railway deal to transport coal

Mozambique, Malawi sign railway deal to transport coal

Mozambique, Malawi and the Brazilian mining company Vale have signed a memorandum of understanding on the construction of a new railway across southern Malawi to take Vale’s coal from its mining concession in Mozambique’s Moatize coal basin (west) to the northern port of Nacala, state-controlled Radio Mozambique reports on Tuesday.

The broadcaster said the railway is necessary because the existing Sena line, from Moatize to the central port of Beira, will be unable to handle the vast amount of coal exports planned by Vale and the other mining companies exploiting the Moatize coal basin.

Radio Mozambique said the new railway will cost about US$2 billion and did not specify who will fund it. The deal was signed in the Malawian capital Lilongwe on Monday.

The total distance from Moatize to Nacala is about 900 kilometres and not all the line will be entirely new, since after passing through Malawi it will join the existing northern railway to Nacala.

Vale intends to start its coal exports from Moatize in the second half of this year, using the Sena line, and the new coal terminal now under construction in Beira.

Mozambique’s Ports and Railways Company (CFM) has threatened to cancel a contract with India’s Rites and Ircon (RICON) if it cannot complete soon a vital coal transport line that links a major coal field to the port of Beira.

Vale and Australia’s Riverdale have invested heavily to mine Mozambique’s estimated 23 billion tonnes of coal, planning to use the Sena Line for transport in the country with some of the world’s largest untapped coal reserves.

Source 

Brasilian Rio Doce Mozambique - RDMZ - 2007 Conceptual engineering for a ~80MW low grade fired coal power plant to supply electrical power to the Moatize coal mining complex in Mozambique. RFP to contract an IPP to develop the project and to sell the power to the RDMZ complex. Draft of the PPA with all legal, technical and operational features of the supply.

https://www.theice.com/homepage.jhtml

Mozambique Coal Images

Mozambique Coal - Moatize

Wednesday, September 09, 2009

Moatize coal mine - helping put Mozambique back on the map

Reported by Jaycee Krüger in South Africa

Brazilian resource giant Vale is pushing forward on development of the $1.3bn Moatize coal mine in Mozambique and expects to start production of coking coal for export late 2011. Vale GM Finance Fabio Bechara said at the Coaltrans South Africa conference being held in Sandton, South Africa that the initial box cut for the open cast mine would start in the second quarter of 2011.

Initial earthworks and civil construction on the coal preparation plant are underway following completion of the detailed engineering studies which took place in the year to end-June. Some 3,500 workers were currently on site at the project while the relocation and resettlement of some 5,000 local people affected by the mine development was also underway.

The port of Beira will handle all the phase one exports but that the port of Nacala would be required to handle export volumes above those levels. The rehabilitated line will be able to transport between 6mt and 8mt of coal annually which is clearly not enough for Vale's long term requirements as well as other potential coal producers in the Moatize region.

The 575km Sena/Beira railroad is being upgraded to handle the anticipated initial export levels. The rehabilitation of the Sena/Beira line had 150kms to go as of end-June and Bechara estimated it would be completed by the first quarter of 2010.

Access to Nacala, 1000km away is complicated because the railway line will have to cross neighbouring Malawi to reach the port situated in northern Mozambique. Bechara said the Nacala corridor is a very important solution for the future of the Moatize coalfield where they are not the only company planning to develop coal mines. The Sena/Beira line has limited capacity and we will need Nacala in about 5 years time.

Bechara said plans to build a coal-fired power station in the Moatize region are constrained by the availability of transmission lines to get the power to consumers elsewhere in Southern Africa. "We have the capacity to produce far more than the 2.5mt/year of coal needed by a local power station generating 600MW - all the transmission infrastructure can handle at present, without costly expansions. Export remains an attractive solution for now.

For more information visit: http://www.vale.com/vale_us/cgi/cgilua.exe/sys/start.htm?infoid=2565&sid=610  

Mozambique: Coal Production Starts at Moatize

9 May 2011

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Maputo — Mozambican President Armando Guebuza and the chairperson of the Brazilian mining giant Vale, Roger Agnelli, on Sunday detonated the first charge of explosives initiating coal production at Vale's open cast mine in Moatize, in the western Mozambican province of Tete.

two men together pressed a button installed in the giant tent where the official ceremony to launch coal production was held. The explosion sent an enormous black cloud of coal dust into the atmosphere, as the crowd burst into applause.

It has long been known that there are coal reserves in Moatize, but under Portuguese colonial rule, and in the initial post-independence period, they were barely scratched in small underground mines. One such mine, now run by the British company Beacon Hill, continues to produce - but at the very low level of 30,000 tonnes a year. Vale is talking of millions of tonnes a year.

The Vale licence was granted in 2004, and even then Vale officials were speaking of Moatize as one of the last great unexploited coal basins in the world. Construction of the mine began on 27 March 2009, when Guebuza and Agnelli laid the first stone.

Guebuza declared that the Sunday ceremony was the confirmation that a dream has now become a reality. "What was previously a dream is now a majestic undertaking in which natural resources are driving the development of Mozambican human resources", he said.

He regarded the start of coal production at the Vale mine as a further victory in the struggle waged by Mozambique against poverty.

Guebuza stressed Mozambique's high potential in natural resources such as coal, natural gas, gold, tantalite, titanium-bearing heavy sands, and phosphates, among others, which are a pole of attraction for national and foreign direct investment. To keep the investment flowing, he pledged that the government will continue to introduce reforms to improve the Mozambican business environment.

Guebuza called on Mozambicans to exploit all the potential of the country's coal reserves in order to generate, in a sustainable and structured manner, more employment, income and development in Moatize district, Tete province, and the country as a whole.

Agnelli announced that so far Vale has invested about two billion US dollars in Mozambique, and intends to invest a further four billion dollars in the next five years.

As for the export of coal, Agnelli expected it to begin within the next two months, despite the delays in rebuilding the Sena railway line, linking Moatize to the port of Beira.

Currently, Vale-Mozambique employs about 8,000 workers, more than 85 per cent of whom are Mozambican. "In the second phase of the project, which is already being developed, we shall reach 15,000 workers", said Agnelli.

He stressed that this relatively large number of waged workers would change the face of Tete, since it would create a large demand for other services, including public transport and supermarkets.

As for new investments in the coming years, Agnelli stressed the plan to build a new railway from Moatize to the northern Mozambican port of Nacala, across southern Malawi, and the improvements to the port so that it can eventually handle 22 million tonnes of coal a year.

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But in the initial phase, the mine will have the nominal capacity to produce 11 million tonnes of coking and thermal coal a year, which will be taken down the 600 kilometres of the Sena line to the new coal terminal under construction at Beira.

Agnelli was confident that, even in the first phase, coal exports will reach between 2.5 and three billion dollars a year. As from next year Mozambique should have a positive balance of payments, with the value of the country's exports surpassing that of its imports.

Vale has also invested over 100 million dollars in projects of corporate social responsibility, including the rehabilitation of Tete Provincial Hospital, the building of schools and health centres, and the development of local agriculture.

Mozambique: Coal

Mozambique has substantial coal deposits situated in the Moatize and Mucanha - Vuzi coal basins in the Tete province. The basin contains seven coal seams and has reserves estimated at 750 Mt. The Mucanha – Vuzi basin is said to contain as much as 3 600 Mt coal reserves, although the basin is severely block faulted.

Brazilian company Vale has so far spent US$300m on development of the $1.3bn Moatize coal mine in Mozambique and expects to start production from it in late 2011. Full production from the Moatize mine in terms of Phase One is planned at 12.7 million tonnes annually of hard coking coal for export; 2.4mt/year of export thermal coal and 2.5mt/year of thermal coal to supply a local power station should one be built.

Riversdale Mining Limited is involved in the Benga coal project in Mozambique. The project is a joint venture between Riversdale (65%) and Tata Steel Limited (35%) and is located in the Tete Province of Mozambique. Coal resources of 4.0 billion tonnes and a coal reserve of 502 million tones have been identified. Construction of Stage 1 has commenced and is expected to be completed in the second half of 2011.

The Zambeze Project, adjacent to the Benga Coal Project, has an identified coal resource of 9 billion tonnes. The Zambeze Project is similar in structure to Benga with 22 coal seams outcropping over strike length of 14 kilometres across the northern portion of the tenement. In June 2010 Riversdale signed a non-bonding MoU with Wuhan Iron and Steel Corporation and a logistics partnership agreement with the China Communications Construction Company for the development of the Zambeze Project.

Vale intends to install a plant to convert coal into liquid fuels in Moatize district, Mozambique
It has been reported that Brazilian mining company Vale announced that it intends to install a plant to convert coal into liquid fuels in Moatize district, in the central Mozambican province of Tete.
Topics:	Energy; Facility	Countries:	Brazil; Mozambique
Industries:	Coal Mining; Oil Refining
Reference:	Reuters	Contact E-mail Address:	N/A
Date Posted:	17.May.2011 14:23:00 [GMT+2:00]

Brazilian mining giant Vale opened a new US$1.7 billion coal mine in Mozambique
It has been reported that Brazilian mining giant Vale opened a new $1.7 billion coal mine in Mozambique in Moatize, outside the city of Tete in northwest Mozambique.
Topics:	Project	Countries:	Brazil; Mozambique
Industries:	Coal Mining
Reference:	Bloomberg	Contact E-mail Address:	N/A
Date Posted:	09.May.2011 14:35:00 [GMT+2:00]	Expiry Date:	04.May.2021

Posted on May 6, 2011 by mine fo

Mucanha – Vuzi basin Mozambique southern Africa contain as much as 3600 Mt of coal reserves. Iron mining company Vale is The largest producer of iron ore paid great attention on coal mining in Mozambique, especially in Mucanha – Vuzi basin. That based on thorough research Mozambique has large coal deposits are located in the Moatize and Mucanha – Vuzi coal basin in Tete province. The data showed here That coal mines have estimated reserves of 750 Mt. The Mucanha – Vuzi basin has coal reserves of 600 million tons. Mozambique is a country in southern Africa That borders South Africa, Swaziland, Tanzania, Malawi, Zambia and Zimbabwe is famous for coal mining.

Two junior mining and exploration companies are looking at coal projects on Mozambique's Moatize coal field, where giant Brazilian mining group CVRD has advanced plans for a major coal mine.

If all three companies get their projects up and running, a huge new coal mining and exporting region could be developed.

The two juniors are Australian coal miner Riversdale Mining and AIM-listed mining, processing and exploration company Central African Mining & Exploration (Camec).

Riversdale is listed on the Australian Stock Exchange (ASX) and owns the Zululand Anthracite Colliery in KwaZulu Natal, bought from Ingwe in 2005.

It bought the rights to ground contiguous with that held by CVRD in October last year and has just released initial results from its drilling campaign. Riversdale says it holds the rights to 203 000 ha and its plans are to fast-track the development of a "sustainable, long-life mining operation".

According to a report by Australian broking firm Hartleys, Riversdale management intends completing a bankable feasibility study by September 2008.

Camec operates in a number of African countries and its latest move is into platinum in SA, where it has bought 44,5% of Pfula Investments for £7,5m.

Pfula owns the rights to 51% and 40% respectively of the Inkosi and Imbasa platinum projects, in which it is the black economic empowerment partner of AIM-listed African Platinum (Afplats).

Camec holds 10 exploration licences totalling more than 300 000 ha of the Zambezi coal basin in Tete province, which the company claims makes it the largest single holder of licences in the region.

According to Camec, the Zambezi coal basin is one of the world's last and largest unexplored coal provinces, with both coking and thermal coal potential.

A diagram posted on the Riversdale website (www.riversdalemining.com.au) shows blocks of the Camec ground sit contiguous with ground held by both Riversdale and CVRD, and that Camec also holds a large section of ground immediately north of the Cahora Bassa Dam on the Zambezi River.

This section covers the Mucanha and Vusi sub-basins, which Camec says could contain a resource of some 3,6bn t.

Camec says it controls the entire Mucanha and Vusi sub-basins, except for a licence covering 20 260 ha, which has been granted to CVRD.

The company adds that reconnaissance geological mapping of its licence areas has already identified various coal seams and carbonaceous horizons. Says Camec: "These are believed to have potential to host world-class coal deposits with coking and thermal coal properties. Importantly, the shallow dips and potentially vast strike extents of the exposed coal horizons make these amenable to open-pit strip mining."

Riversdale says its initial drilling work has intersected two coal seams that are 15 m and 8,4 m thick at depths of 162 m and 69 m respectively. It says the coking properties are "indicative of those required for a hard coking product".

Coking coal is used to fuel blast furnaces for the production of steel, whereas thermal coal is used for domestic heating and as fuel for coal-fired power stations.

Riversdale's priority is to define the resource required and complete the bankable feasibility study for a mine that would produce 3m saleable tons annually in the first phase of development.

It says "additional exploration will also be aimed at identifying thermal coal resources capable of supporting the establishment of local power stations and related industries."

Riversdale comments: "Discussions are already under way with infrastructure providers of rail and port facilities to ensure access for initial anticipated coal production in 2009."

Rail and port infrastructure will be a key issue. Three existing ports have been suggested as possible sites for export terminals: Beira, Quelimane and Nacala.

Mozambique’s energy

Mozambique’s energy, agricultural potential fought over by emerging economic powers

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26 April 2011

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Mozambique’s potential for production of coal, biofuel and agricultural products is being fought over by the new emerging economic powers in search of natural resources on a global scale, such as China, India and Brazil, says researcher Loro Horta. “The expansion of the mining industries and crescendo of foreign investments has the potential to bring significant benefits, but also new challenges to the country,” said Horta in a recent article in Yale Global magazine.

Traditionally dependent on traditional agriculture and, mainly, exports of cashews, sugar, cotton and tea, Mozambique’s economy has benefitted from growth of the mining sector, and increasing contributions from natural gas, coal and aluminium, are expected.

The energy sector has benefitted most from foreign investment and the African Development Bank (ADB) expects that in 2020 Mozambique will be Africa’s second-largest coal exporter, with annual sales of close to 110 million tons. The coal reserves are estimated at 10 billion tons, “feeding the interest of China, India and Brazil, all anxious to secure new energy resources to drive their rapid economic growth.”

The biggest individual investment by China in Mozambique is a US$1 billion coal mining project by Wuhan Iron and Steel, which is also close to the amount that India has pledged to invest in the sector and that Brazil’s Vale has invested in mines in the provinces of Tete and Zambézia.

Other resources that are plentiful in Mozambique include titanium, natural gas and tantalum, as well as precious gems such as emeralds, rubies and sapphires in the provinces of Niassa and Cabo Delgado. The land is also fertile and whilst Brazilian companies are interested in biofuel production, China is interested in agricultural production.

According to the Shanghai Chamber of Commerce, the government of Maputo has offered land for rental to Chinese companies at US$8 per hectare. “With ports and security driving trade, China has become Mozambique’s second-largest trading partner,” noted Horta, who was born in Mozambique and is a graduate of the University of the People’s National Army and the Central School of China’s Trade Ministry.

Trade between the two countries more than tripled between 2007 and 2010, from US$208 million to US$690 million. The Export-Import Bank of China has provided the Mozambican government with over US$2 billion for construction of a large dam and Chinese companies have been building road, bridges, military facilities, hospitals and other facilities across the country.

The government sponsored the modernisation of the main airport, construction of the National Stadium, which was inaugurated last Saturday, as well as Mozambique’s largest convention centre.

However, interest in the country is also strategic as the Mozambican Channel is an important alternative route to the Suez Canal. The country also offers the closest sea link to Zambia and Zimbabwe, which are home to two of the five Chinese special economic areas in Africa.

In January of this year, the Mozambican press reported that Chinese shipping companies were negotiating with the Mozambican government for the modernisation and expansion of the port of Beira, which “could become another ‘pearl’ in China’s ‘necklace’” of a group of important ports on the Indian Ocean.

According to Horta, the Mozambican government has been doing, “a sophisticated balancing act,” in relation to the different national interests at play. "However, with the country’s growing mining sector, its biofuel potential and discoveries of oil, this balancing act will probably become more complex,” the researcher said.

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Mozambique Energy

ENERGY ENERGY AND DEVELOPMENT – BURNING ISSUES Use of modern energy is a strong factor in economic growth and in human development. Modern healthcare, a vibrant private business sector and education all entail the use of energy. "The use of poorly ventilated stoves can have the same effect as smoking two packages of cigarettes per day.” UNDP The lack of access to modern energy (electricity, gas and oil products) is a major part of being poor and without means of economic opportunities and overdependence on traditional forms of energy (biomass such as wood, charcoal, dung from animals or agricultural waste) has a number of detrimental effects on the lives of the poor, undermining people’s health and environment. Energy Situation in Mozambique Mozambique is endowed with huge energy resources. The Cahora Bassa dam, is one of the largest hydropower installations in Africa. With 2,075 MW, it is about half the size of the installed capacity of E2, the company that services eastern Denmark and Mozambique has the potential to build capacity equivalent to 6 times of Cahora Bassa. Moreover reserves of natural gas are being exploited and gas is being exported via a new pipeline to South Africa. The chances of locating oil appear to be promising. Mozambique also just started exploring its reserves of coal, which are estimated at 10 billion tons. In its national strategy to combat poverty, the Government of Mozambique has identified the energy sector as one of the main areas for investment. (See insert). Already electricity is being exported to neighbouring countries and it is also the foundation for the major foreign direct investments. Provided the infrastructure can be upgraded Mozambique has the energy to sustain a considerable rate of growth. Yet the lives of Mozambique’s poor are characterised by the absence of the comforts and services associated with modern energy. Despite Mozambique’s huge production of electricity, only some 5% of households have access to electricity and 85% of all energy needs are covered by traditional fuels, mainly wood and charcoal. Reflecting the national priorities, Energy Sector Programme is one of the pillars of the cooperation between Mozambique and Denmark. The programme provides support to different levels in the sector. For Mozambique to exploit its energy resources in the most effective way the Ministry of Energy must perform well. Denmark supports the Ministry to formulate a comprehensive national energy master plan, covering all types of energy needs and resources. The plan will guide future energy investments, whether funded by Government or external donors. The availability of electricity is essential because it widens opportunities for initial initiatives and activities by which the people can improve their welfare. It is also a critical factor in promoting the structural changes necessary for rapid economic growth. Investment in complementary economic activities and alternatives o agriculture (agro-industries, other branches of industry and services) depend on the availability of electricity. These activities are necessary for raising productivity and production in the agricultural sector, and for absorbing the labour surpluses that will arise in agriculture, as productivity increases. Investment in complementary activities and alternatives to agriculture tend to take place in areas/regions dependable sources of energy. As a result, the availability of energy is a major factor determining the existence or eliminating of regional imbalances in economic and social development. The poorest segments of the population (above al, in rural areas) depend almost exclusively on firewood and charcoal as energy sources. With a growing population, the danger arises of environmental degradation, especially in the most populated areas. For this reason, it is very important to pursue research and development of alternative energy sources. ACTION PLAN FOR THE REDUCTION OF ABOLUTE POVERTY, 2001-2005. Mozambique’s national strategy for combating poverty. The Energy Fund (FUNAE) funds energy projects in rural areas, which are otherwise difficult to reach with investments. FUNAE seeks to promote projects that ensure economically and environmentally viable energy provision to the poor in rural areas. As part of the programme, FUNAE receives assistance from Denmark in terms of advisers and financing for projects. Denmark also supports the national power utility Electricidade de Moçambique (EdM). Denmark has funded the reorganisation of EdM into a commercially competitive organisation, well equipped to expand and operate the national grid to new parts of the country. Furthermore, a number of investment projects, that expand and strengthen the national grid, are being carried out as part of the programme. Support has also been given to a number of environmental projects, the drafting of a gender strategy, which now serves as a tool when appraising new energy projects, as well as the implementation of the national strategy against HIV/AIDS in the energy sector.		CONTACT For more information about Danida's energy sector programme kindly contact Flemming West (flewes@um.dk) or Farida Saifodine  (farsai@um.dk) at the embassy.
Edited April 9, 2009

© Ministry of Foreign Affairs of Denmark

Gas discovery with Mozambique's first deep-water well

Gas discovery with Mozambique's first deep-water well

12 March 2010

The first deep-water well drilled offshore Mozambique has come in as a substantial gas discovery for Anadarko

Anadarko Petroleum says a deep-water natural gas discovery gives "a strong indication of the potential" of Mozambique's Rovuma basin. The find is likely to encourage Eni and Statoil, operators of two neighbouring blocks, to start drilling work before the expiry of the first phase of their licences, which, with Anadarko's, were awarded in 2006 under the country's second bidding round.

Anadarko said its Windjammer-1 well, drilled off the northernmost part of the coast in Area 1, found 146 metres of net gas in a 366-metre column, in "high-quality reservoir sands". Drilling, by the Belford Dolphin drillship, was continuing last month to test deeper objectives. Water-depth at location, about 40 km offshore, was 1,464 metres.

The company said 3-D seismic has shown about 50 leads and prospects in Area 1, which extends about 160 km south from the border with Tanzania and out to about 55 km offshore. Anadarko will be moving the drillship to the southern part of the block for the next well, into the Collier prospect, and said it is budgeting for an additional two to four wells in the basin this year. The licence carries a seven-well commitment.

Area 1 was awarded to Anadarko on a 100% basis, but the firm has taken in partners to give the following interests: Anadarko, 43.0%; Mitsui, 23.5%; Indian firms BPRL Ventures (part of Bharat Petroleum), 11.75%; and Videocon, 11.75%; and the UK's Cove Energy, 10.0%. State-owned Empresa Nacional de Hidrocarbonetos has a carried 15.0%.

The other blocks under licence in the offshore Rovuma basin are Eni's Area 4, Statoil's Areas 2 and 5, and Petronas' Areas 3 and 6, while Anadarko also holds a licence covering the onshore part of the basin. Further south, in the Mozambique basin, the main operator is South African Sasol, which holds Areas 16 and 19 and the onshore Pande and Temane production licences. Since early-2004, gas from the Pande and Temane fields has been exported through a 26 inch, 865 km pipeline to Secunda, South Africa, where it enters Sasol's distribution network.

Anadarko's discovery should add interest to the country's fourth licensing round, which opened in November and offers seven onshore areas. Applications close on 30 April.

Fourth Major Gas Discovery Offshore Mozambique

Company Cove Energy PLC TIDM COV Headline Fourth Major Gas Discovery Offshore Mozambique Released 07:00 07-Feb-2011 Number 7567A07

RNS Number : 7567A

Cove Energy PLC

07 February 2011

 7 February 2011

Cove Energy plc 

Fourth Major Gas Discovery Offshore Mozambique
Cove Energy plc ("the Company" or "Cove", AIM:COV), the AIM quoted upstream oil and gas company, together with the operator Anadarko  Petroleum Corporation, is pleased to announce a fourth major gas discovery at the Tubarão  prospect in the Rovuma Basin Area 1 block, Offshore Mozambique ("Area 1 Rovuma Offshore"). 
The full text of Anadarko's release is copied below:
 Anadarko Announces Discovery

Offshore Mozambique

HOUSTON, Feb. 7, 2011 - Anadarko Petroleum Corporation (NYSE: APC) today announced the latest in a string of major deepwater natural gas discoveries off the coast of Mozambique. The Tubarão discovery well encountered more than 110 net feet (34 meters) of natural gas pay and no water in a high-quality Eocene-age reservoir that is separate and distinct from the hydrocarbon accumulations in Anadarko's three previous discoveries in the Offshore Area 1 of the Rovuma Basin.

"The discovery at the Tubarão prospect opens an entirely new play style, which has additional opportunities in Mozambique's Offshore Area 1," Anadarko Sr. Vice President, Worldwide Exploration Bob Daniels said. "This is our fourth significant discovery in the offshore Rovuma Basin and further strengthens our confidence in our geologic and geophysical models of the basin. Our seismic imaging indicates Tubarão's areal extent could cover about 15,000 acres that will be better defined with appraisal drilling. In addition, we continue to safely enhance our drilling efficiencies, procedures and methodology in Mozambique, as we drilled this well in half the time of our first exploration wells."

The Tubarão discovery well was drilled to a total depth of approximately 13,900 feet (4,237 meters) in water depths of approximately 2,950 feet (898 meters), approximately 18 miles (29 kilometers) off the Mozambique coast. The partnership plans to preserve the wellbore at Tubarão for potential utilization in future testing. Once operations are complete, the partnership plans to mobilize the rig to the previously announced Windjammer discovery, approximately 26 miles (42 kilometers) northeast of Tubarão, to begin a coring program that will be followed by appraisal drilling in the Windjammer, Barquentine, Lagosta complex.

Anadarko is the operator of the 2.6-million-acre Offshore Area 1 with a 36.5-percent working interest. Co-owners in the area are Mitsui E&P Mozambique Area 1, Limited (20 percent), BPRL Ventures Mozambique B.V. (10 percent), Videocon Mozambique Rovuma 1 Limited (10 percent) and Cove Energy Mozambique Rovuma Offshore, Ltd. (8.5 percent). Empresa Nacional de Hidrocarbonetos, E.P.'s 15-percent interest is carried through the exploration phase.

John Craven, CEO of Cove said:

"We are very pleased to announce a fourth major gas discovery in this prolific Rovuma offshore block. The high quality gas reservoir at Tubarão, located 16 miles south-west of the previously announced Lagosta discovery, confirms a new play concept and de - risks similar prospects in the block.

"Our Joint Venture has already commenced detailed studies and appraisal planning for a Liquefied Natural Gas (LNG) development at the Windjammer, Barquentine and Lagosta discoveries and adding a potential further 15,000 acre Tubarao gas discovery to this inventory expands the resource base considerably.

"The Belford Dolphin deepwater rig will now commence an appraisal programme in the Windjammer, Barquentine and Lagosta gas complex which will involve drilling and coring, to be followed by flow testing, part of the necessary steps to delineate the huge gas resource resulting from the initial highly successful exploration campaign offshore Mozambique.

"In addition to the hydrocarbons discovered so far, there is further significant oil and gas potential remaining in the block and several prospects and leads have already been identified, consequently a return to exploration drilling is planned later this year continuing through 2012." 
- Ends -
For further information, please contact:

Cove Energy plc
John Craven, CEO	c/o Billy Clegg Tel: +44 (0)20 7831 3113
Cenkos Securities
Jon Fitzpatrick Ken Fleming	Tel: +44 (0)20 7397 8900  Tel: +44 (0)131 220 6939
Financial Dynamics
Billy Clegg/Edward Westropp	Tel: +44 (0)20 7831 3113

John Craven, Chief Executive Officer of Cove, and a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, March 2006, of the London Stock Exchange, has reviewed and approved the technical information contained in this announcement. Mr Craven is a petroleum geologist with approximately 36 years' experience.

Notes to Editor

Cove has established a strong position in East Africa with exploration interests in Area 1 Offshore Mozambique, which contains the Windjammer, Barquentine, Lagosta and Tubarão  gas and Ironclad oil discoveries where drilling operations are planned to continue  through 2011. Cove also holds exploration and production interests in Mozambique Onshore, Kenya Offshore and in the Mnazi Bay Gas Field in Tanzania.

For more details including a map of the Tubarão discovery visit: www.cove-energy.com.

Cove Energy has a strong management team with a wealth of experience in the oil and gas business and the operation and management of companies in the public arena.  Michael Blaha, Executive Chairman and formerly Country Chairman for Royal Dutch Shell Groupin Algeria, is a Petroleum Engineer with twenty nine years industry experience, his entire career spent working at Shell.  John Craven, Chief Executive Officer was previously CEO and founder of Petroceltic International plc, and is a petroleum geologist with thirty six years experience in senior technical and commercial roles in upstream oil and gas exploration and production companies.

www.cove-energy.com

Mozambique tender for oil blocks in 2005

Best Prospect Industry

Natural oils and Bio-Diesel

The Ministry of Mineral Resources and the National Petroleum Institute (INP) manage the considerable oil and gas exploration possibilities that exist in the provinces of Gaza, Inhambane, Sofala, Zambézia, Nampula, Cabo Delgado, and related offshore areas. The government opened a bidding round in July 2005 for the exploration of several offshore blocks in an area known geologically as the Rovuma Basin, named for the Rovuma River that forms Mozambique‟s northern boundary with Tanzania. On March 8, 2006, the government announced that five companies had been invited to commence negotiations for a concession contract. 

The American company Anadarko Petroleum Corporation (Anadarko) won the bid for Area 1. This area is a 2.64 million-acre block that includes approximately 90,000 onshore acres stretching eastward 35 miles offshore, with water depths extending down to 6,000 feet. Anadarko completed contract negotiations in December 2006. In 2007, Anadarko announced that it saw “huge” potential for its oil exploration program in Mozambique, one of Africa‟s new frontiers for oil and gas drilling. In 2010, results from preliminary exploratory drilling were promising. 

The return of companies like Anadarko has bolstered the Mozambique government‟s determination to open up other parts of the economy to foreign investment.

In 2007, Mozambique issued an additional oil exploration tender for the southern Inhambane province. Mozambique offered 61,000 square meters divided in nine projects, offshore and onshore, in the districts of Pande and Temane. Mozambique invited small and medium companies with technical capacity and strong finances to participate. In the south, the Pande gas field is a proven world-class natural gas deposit, with reserves of over 3.5 trillion cubic feet. SASOL (South Africa) completed construction of a natural gas pipeline from the Pande and Temané gas fields to its synfuel plant in Secunda, South Africa in 2004. In early 2005 SASOL routed some of this gas back to Mozambique through a newly built gas pipeline running from South Africa to Maputo. The Mozambican government has rights to several out-take points on the pipeline and is actively seeking investors in energy-intensive projects to use the natural gas.

Investors are now beginning to explore the investment possibilities of bio-diesel in Mozambique. As of 2009, Mozambique approved foreign direct investment of $256 million in the biofuel sector. In 2009 Mozambique and Brazil signed a biofuel exploration agreement valued at $6 billion. In 2007, Mozambique signed a $510 million deal with London-listed Central African Mining & Exploration Company (CAMEC) to establish an energy plantation and to build a plant to produce 120 million liters of ethanol per year, as well as fertilizers. In addition, an American NGO TechnoServe leads initiatives to further explore the potential of bio-diesel opportunities in Mozambique.

Best Prospects/Service

Equipment supply and maintenance in both offshore and onshore drilling represents the best prospects.