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Mozambique bottlenecks not discouraging Vale nor stopping growth
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27th September 2013
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Logistical difficulties in Mozambique have not altered Brazilian mining major Vale’s plan to invest $8-billion in the south-east African country. The group’s local subsidiary, Vale Mozambique, has developed and operates the Moatize coal mine in the interior province of Tete. The coal then has to be shipped to the coast for export. Currently, this is being done down the Sena railway to the port city of Beira. To date, problems with the Sena line, including damage caused by torrential rains earlier this year, have meant that the miner has not yet achieved its annual export target.

“The export of 4.5-million tons a year was planned, but we still have not hit this mark,” Vale Mozambique director Ricardo Saad recently told the Lusa news agency. “We started production in August 2011, in 2012, we exported close to 3-million tons and, this year, we intend to export 3.5-million tons and hit, in 2014, the maximum capacity available to Vale on the Sena line.”

Moatize Phase 1 has a nominal yearly production capacity of 8.5-million tons of metallurgical coal and 2.5-million tons of thermal coal. Phase 2 will double these figures.
Little wonder then that Vale is investing heavily in improving Moatize’s links with the sea.

The group is investing more than $1.2-billion in the rehabilitation of the existing, and the construction of a new, railway track through Malawi and Mozambique to link Moatize to the port of Nacala to complement to existing Sena line from Tete to Beira. Work started in 2012 and should be completed during the second half of next year. The Nacala line will run for 912 km, of which some 250 km will be new construction (mostly in Malawi). The resulting line will have a nominal capacity of 18-million tons a year. It will also be used to transport people and general cargo.

Coal, along with hydrocarbons, is one of the main forces driving Mozambique’s economic growth. In the middle of the month, Planning and Development Minister Aiuba Cuereneia revealed that, during the first six months of this year, the country’s “extractive industry” had grown by 22%, which helped drive the country’s total economic growth for the period to 6.5%. Other fast-growing sectors were “financial activities”, up 23.3%, and “government services”, which increased by 16.2%. In comparison, the automotive and other machinery repair sector grew by 9.2%, agriculture grew by 6.7% and livestock production by 5.5%. On the other hand, the electricity sector saw a decline of 22% and forestry a decline of 3.7%.

Economic performance suffered as a result of the rains during this period. Other factors hitting the economy were problems with road transport on National Highway 1, a strike by health professionals, and attacks by armed Renamo elements.

Even so, the country’s exports in the first semester came to $995.9-million, international reserves reached almost $2.3-billion and 106 854 jobs were created. However, with some 300 000 young Mozambicans entering the job market every year, more has to be done to create employment. In this regard, the United Nations is suggesting that special attention should be given to agriculture and fisheries.

Edited by: Martin Zhuwakinyu

 

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