The state run Noticias newspaper said that a unit of India's Jindal Steel and Power has discovered coal reserves of 1,650 million tones in northwest Mozambique.

The paper quoted a ministry of mineral resources source as saying that JSPL Mozambique Minerals had submitted a request for a mining feasibility study at the Cahora Bassa dam site in Tete province.

The report said the company was looking at producing 2.5 million tonnes per year from 2011, rising to 7.4 million tonnes by 2013.

Jindal is the latest international firm to discover coal in the area one of Africa's largest sources of untapped deposits, although Mozambique's war-shattered infrastructure means exporting the mineral remains difficult and costly.

Brazilian mining giant Vale has a concession in the Tete district of Moatize which it predicts will produce 11 million tonnes of coal a year.

(Sourced from Reuters)