Renovation of Mozambique's $200 million Sena railway line, partly funded by the World Bank, is on track and it is due to open to general traffic in January 2010, a bank official said on Tuesday. The bank is providing slightly more than half of the funds needed to upgrade 665 km of the line, which links the rich untapped Moatize coal fields to Beira port, and is seen as vital for coal exports.

The basic construction is expected to finish by end-September, whereby work trains will be able to travel, Jose Chembeze, a transport specialist at the World Bank, told Reuters in an email.

It will open to general traffic after all the testing and final finishing is done, likely by January 2010.

The Bank is providing financing of $104.5 million, with another $45 million under consideration. The difference is funded by the CCFB consortium, consisting of state railway company CFM, which holds a 49 percent shareholding, and Indian firm Rites and Ircon, with 51 percent.

Beira is the most logical port for economic transport of coal from the Moatize mines and the Sena Line is the best mode of transport for so long as Beira port can handle the coal, a maximum of 12 to 15 million tonnes per annum, Chembeze said.

He said discussions were underway to further upgrade the rail line, enabling it to handle 12 million tons of coal freight a year, and the additional upgrading costs are estimated in the range of about $250-280 million.

Brazilian miner Vale launched construction of its $1.3 billion coal project at Moatize in Tete province in March, with a capacity to produce 11 million tonnes of coal a year.

Besides Vale, Riversdale and CAMEC were at various stages of mining in Mozambique, attracted by the Tete coalfields, considered the largest unexplored coal reserve in the world with an estimated 3.6 billion tonnes of reserve.

The Sena line, will be crucial to get the coal to the international market and develop Mozambique's economy.

The Sena Line is also the lifeline of the region and will have tremendous impact on agricultural production from the Zambezi valley and restoration of the households and population affected during the years of civil war in Mozambique, Chembeze said. (Reporting by Wendell Roelf)

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