MOZAMBIQUE - Industry
Vice-President & Country Head, Jindal Africa
Manoj Gupta was born in 1966 and graduated from the National Institute of Technology in Jamshedpur, India, with a degree in Mechanical Engineering. Prior to assuming his current position, he worked for Tata in India, and has over 22 years of corporate experience in a variety of technical and managerial positions.
The core business of Jindal is steel and power, so the idea behind coming here was to mine coal for our own steel production operations in India. Mozambique is one of the richest countries in the world for mineral resources. In 2008, when we saw that coal exploration in Mozambique was beginning, and particularly coking coal, we came here to set up a mining operation. Actually, before we set up here, two major companies had already done so. Our strategy is not to mine and sell the coal in the local market here, but to utilize it for our own international expansion program. Mozambican coal has the opportunity to respond to the growing market of coal in India, so one of the challenges is to find coal at competitive rates, which is where Mozambique fits into our plans. In addition, risk analysis suggests that Mozambique is a sensible destination for our company, as there is relatively reliable political stability, a strategic coastal location, and good people, in addition to the fact that things move fast here. Overall GDP growth in Mozambique has been at over 7% over the past decade. The only real issue is one of language, although many people speak English, and Portuguese is not too difficult to get a grasp of.
We do not consider them our competitors since we are the end-user of the coal that we mine. In fact, we may even have to buy coal off them, depending on our requirements. We talk to the other companies through the common forum that is the Coal Association, however, the effectiveness of this body will depend on the miners themselves. It has the potential to be used as a platform for the discussion with the government, such as the future projects including the expansion of the ports, railway, and other infrastructure.
We took 1.5 years to explore the mine, and on finding the coal we signed a contract with the government of Mozambique, which gave us mining rights for 25 years. It took us another 1.5 years to develop the mine infrastructure. When fully operational in terms of necessary infrastructure, plants, accommodation, and utilities, we began exploiting it. Since mid 2013, we have exported more than 150,000 tons of coal. However, the quantity is short of our requirements, as the infrastructure is not yet synchronized with production. In phase I, we have developed a 3 million-ton-per-annum (mtpa) capacity coal processing plant and now we are moving ahead with another 7 mtpa plant, so, within the next three to four years, we should be able to reach the 10 mtpa level with an option of reaching up to 20 million mtpa if infrastructure is adequately developed.
The slurry pipeline, while not a new concept globally-speaking, is innovative for Mozambique. We have already done preliminary studies that confirm prove the feasibility of transferring coal to the slurry pipeline. This would be a cost-effective and environmentally friendly means of transporting the resource to the nearest port, approximately 500 kilometers away. It is very feasible, and will support infrastructural capacity. With government support, the system could be online within a couple of years.
All the developments over the past few years have had an amazing effect on the country. The mining industry is responsible for providing training and education, and a range of corporate social responsibility (CSR) projects. Ultimately, as the industry grows, there is a knock-on effect on the country itself and its economy, as the sector grows and provides more employment for the citizens of the state.
Developing human capital is an integral part of any business. If the proper resources in terms of equipment, manpower, and knowledge are present, then your business can be developed. We are trying to leverage what Jindal has already done in India and across the globe, and to convey our experience to workers. Training is necessary, however, at all levels of the organization, myself and other management-level staff included. We should strive for continuous, unlimited improvement of our skills and knowledge.
CSR is also an integral part of any business. Our strategy is very clear; we identify the projects that people need to improve their situation, specifically the kind of training, education, and healthcare needed. We have worked on clinics that provide free healthcare and medicine for villagers. We have renovated a number of schools, and we distribute study materials. We also send individuals for training from Mozambique to India. In 2012 we sent 25 people, and are planning to have sent the same number by year-end 2013. Water problems are another huge issue. We are in partnership with Hidroelectrica de Cahora Bassa (HCB), one of the largest companies engaged in hydroelectric energy, and another mining company to bring water to the surrounding region. That project alone is worth ‚¬9 million.
Simply put, to make Jindal the fastest-growing, and largest company in Africa.
© The Business Year – October 2013