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Grindrod plans switch from coal in Mozambique

Maputo - SA logistics group Grindrod plans to switch to processing mainly magnetite instead of coal at its Matola terminal in Mozambique, once it reaches a target to more than double capacity, a company official said on Wednesday.

The port aims to process 20 million tonnes of minerals a year by March 2018 from the current 7.5 million tonnes, said Grindrod Terminals commercial executive Sean Rowan.

"Originally the expansion was driven primarily around coal, but with the decline in the coal market we have had to look for a different strategy. Magnetite will be the main volume driver," Rowan told a conference in Maputo.

Magnetite is a magnetic naturally occuring iron oxide used in a variety of industrial and other applications.

"Ultimately, on completion the total terminal capacity will be 20 million tonnes per annum, with an end state of 15 million tonnes of magnetite iron ore and 5 million tonnes of coal," Rowan said.

The expansion would be in phases, with capacity seen at 12 million tonnes by July 2016, Rowan added, without saying how much it would cost.

The Matola terminal, outside Mozambique's capital Maputo, is an increasingly important route for local companies that have been struggling to ship all their coal for export due to congestion on railways leading to terminals within the country.

Mozambique is estimated to have some of the world's largest reserves of coking coal, used in steel-making and has seen a flood of foreign investment into its mining and energy sectors in the last few year.

But a surge in kidnappings and political violence has worried some investors and prompted Rio Tinto to withdraw expatriate employees' families earlier this month.

Rowan said the unrest was "a bit of a concern" but would not deter Grindrod from investing in Mozambique.

"Grindrod is very much entrenched in Mozambique and we understand the environment," he said.

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