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Mozambique’s new Nacala coal line already in line for upgrade

17th June 2016

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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In Mozambique, the coal transport capacity of the new Nacala Corridor railway route, from the inland Moatize coalfield to the port city of Nacala-a-Velha, will be increased with a $3-billion investment in the near future. This was reported last week by Mozambique Cabinet spokesperson Mouzinho Saíde in Maputo. He made the announcement because the Mozambique government had, as the concessionary of the ports and most of the railway lines concerned, approved a direct agreement with the concessionaires involved, the Northern Development Corridor (abbreviated to CDN in Portuguese) and the Nacala Integrated Logistics Corridor (CLN being its Portuguese abbreviation).

“The agreement does not create any financial obligation on the government, since the risks of logistics operations will be the responsibility of the concessionaires and their promoters, including the Vale and Mitsui companies,” he said. He further reported that the government had also approved the transfer of the Nacala port contract to another company with the same shareholders as the original, with the same rights, obligations and duration. In addition, the Cabinet gave approval for the State-owned Ports and Railways Company of Mozambique (better known as CFM) to sell all its stakes in CDN, CLN and the Central East African Railways (which operates Malawi’s railway network and whose tracks form part of the Nacala line).

Of the total supplementary investment, $1.9-billion will be spent in Mozambique and the remaining $1.1-billion in Malawi. Currently, the Notícias newspaper reports, the Nacala line has a capacity of 22-million tons a year (Mt/y), and the new investment will “significantly increase the capacity of the line”. The newspaper did not, however, give any figures. It should also be pointed out that, in late 2015, the same newspaper had reported that the Nacala line would have a capacity of more than 11-Mt/y by the end of 2015, growing to 13-Mt/y in 2016 and 18-Mt/y in 2017. The plan then was to run 1.5-km-long trains, each composed of four locomotives and 120 wagons. As for the port, its new coal terminal was designed to have a stockpile capacity of 1.45-billion tons.

The Nacala line runs for 912 km and comprises 684 km of refurbished track, mostly in Mozambique, and 228 km of new track, mainly laid in Malawi. The original investment to develop the line and its associated port facilities was $1.5-billion. Previously, Brazilian mining group Vale, which has developed the Moatize coal mine, owned 70% of CLN, but, in December 2014, agreed to sell half of this share to Japanese group Mitsui, as part of a deal which saw Mitsui also take a 15% stake in Vale Mozambique, which owns 95% of the Moatize mine. This transaction has not yet been concluded, but is still under way. (It should, perhaps, be noted that Mitsui is one of the shareholders of Valepar, the holding company that is the majority shareholder in Vale.)

The Nacala line has been developed because of the inadequacies of the Sena railway from Tete (the province in which Moatize is located) to the port city of Beira. These inadequacies have prevented Moatize, Vale’s biggest and most important operation in Africa, from reaching its full production capacity. And now another problem has emerged: insecurity in central Mozambique has begun to affect Sena line operations. It was also reported last week that gunmen had fired on a Vale train in the Cheringoma district of Sofala province as it was returning to Moatize from Beira. The locomotive driver was injured by glass from the shattered windscreen.

Officials blamed armed elements of the opposition Renamo party, which strongly denied the allegation. “If Renamo were attacking Vale trains, Vale would not have trains to run on that line. But more than ten trains per day run,” stated Renamo spokesperson Antonio Muchanga.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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