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Railway limitations still a serious problem for Mozambique’s coal sector
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6th June 2014
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The inadequacies of Mozam-bique’s current coal export infrastructure were again exposed at the end of last month when a Vale Mozambique train carrying coal from the Moatize mine to the Port of Beira along the Sena railway was derailed. Vale Mozambique is a subsidiary of Brazilian major mining group Vale and the Sena line runs for 575 km from the inland City of Tete (in the province of the same name; Moatize is near by) to Beira.

The derailment happened on May 27. The train was composed of 42 wagons and was carrying 2 000 t of coal. The newspaper Notícias reported that preliminary indications were that the accident was caused by excessive speed. No fewer than 32 of the wagons completely toppled over, spilling their cargo and forcing a halt to all traffic on the line. Usually, more than 24 trains run on the line every day, carrying coal for Vale, Rio Tinto and Indian group Jindal, who all operate coal mines in the Moatize district of Tete.

“It is still not possible to estimate the amount of the cargo that could be recovered, nor the losses caused,” Vale Mozambique spokesperson João Pereira told the local media the day after. The accident took place at kilometre 357, near Sinjal station, a fact which made it easier for the Mozambican Railways Company (CFM) to recover the wagons and restore the rail traffic. To ensure the most rapid possible restoration of service on the line, the Sena Line Reconstruction Brigade director, Elias Xai-Xai, personally supervised the work.

CFM (which is also the country’s ports company) is currently investing some €164-million in increasing the capacity of the Sena line from 6.5-million tons/year (Mt/y) to 20-Mt/y. A key phase in this programme is now starting – the construction of passing loops at 25 of the 31 stations on the line. The work is being carried out by a Portuguese consortium of Mota-Engil and Edvisa (part of the Visabeira group).

The derailment came only a few days after new Vale country man- ager for Mozambique and CEO of Vale Mozambique Pedro Gutem-berg warned that logistical problems were damaging the competitiveness of the country’s coal industry. He cited rail and shipping costs, plus a drop in coal prices, as the causes of Moatize operation’s $44-million loss during the first quarter of this year. He pointed out that it was five times cheaper to transport coal from Australia to China than from Mozambique to China. This was not just due to the African country being much further away, but also because Mozambique’s coal mines were well inland.

He urged Maputo to assist the sector by temporarily reducing taxes on the coal sector. “It is a mechanism some countries use, to reduce taxes for a certain period, until the situation on the market improves and they can recover their taxes,” Gutemberg told the media in Maputo. “We still have confidence in Mozambique without doubt but we want certain questions to be treated in a concrete fashion.”

The Brazilian group is currently creating an alternative railway route from Moatize to the sea. This will run, via Malawi, to the Port of Nacala.

Gutemberg assumed his position in Maputo on March 1. He is now also Vale’s director of coal. He is a metallurgical engineer by background, has a master’s degree from the Pontifical Catholic University of Rio de Janeiro and a PhD from McGill University in Montreal. He subsequently worked for management consultancy McKinsey and then for Rio Tinto Brazil, before joining Vale. His previous post was as Vale’s director of ferrous technology. His predecessor in Mozambique, Ricardo Saad, is now Vale’s director of Africa, Asia and Australia projects and remains based in Maputo.

 

Edited by: Martin Zhuwakinyu

 

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