Vulcan is investing €140.6 million ($160 million) to electrify its Moatize coal mine in central Mozambique, a project the company says will make it Africa’s first fully electric mining operation.

The investment comes as mining companies across the continent look for ways to cut fuel costs while improving environmental performance.

The project includes a 300-megawatt power plant that will supply electricity to mining operations, mineral processing facilities and the company’s rail network.

The move is expected to reduce the mine’s reliance on imported diesel and lower emissions from heavy equipment.

For Mozambique, the investment could deliver benefits beyond the mine. Government officials say the project will reduce diesel imports, improve air quality around nearby communities and strengthen the country’s electricity system by supplying excess power to the national grid.

The investment also reflects a broader shift in Africa’s mining industry, where companies are adopting cleaner energy technologies while seeking to improve efficiency and reduce operating costs.

A move away from diesel

Speaking during the inauguration of new equipment at the Moatize mine, Vulcan CEO Mukesh Kumar said the company is building a 300-megawatt power plant to support its operations.

Around 90 megawatts will power mining activities, 30 megawatts will be used for processing and about 100 megawatts will electrify the company’s rail corridor.

Kumar said the project will allow Vulcan to meet most of its own electricity needs while sending surplus power to Mozambique’s national grid.

He added that the company currently spends about $150 million a year on diesel imports, making electrification an important step toward lowering operating costs.

Government sees economic and environmental gains

Mozambique’s Minister of Mineral Resources and Energy, Estevão Pale, said the investment will help reduce the country’s dependence on imported diesel because Mozambique does not refine the fuel domestically.

Lower fuel use will also reduce emissions and improve the efficiency of mining operations, he said.

Pale added that electrifying heavy equipment is expected to reduce coal dust and improve air quality for communities living close to the mine.

He said the project should bring environmental and economic benefits while supporting higher productivity.

Expanding Vulcan’s footprint in Mozambique

Kumar said the company also plans to use ash from its thermal power plant to manufacture green cement, reducing waste while creating another industrial product from mining operations.

Vulcan is part of India’s Jindal Group, a diversified industrial company valued at about $18 billion.

The group entered Mozambique through the Chirodzi coal mine before acquiring the Moatize mine and the 912-kilometer Nacala Logistics Corridor from Brazil’s Vale in 2022 for more than $270 million.

The company has produced more than 35 million metric tons of coal annually at Moatize over the past three years.

Vale operated the Moatize mine for 15 years before selling the business to Vulcan.

The acquisition included the rail corridor used to transport coal to export terminals, giving Vulcan control of both the mining operation and its logistics network.