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Mozambique stacker accident will not delay coal exports, Vale assures

14th August 2015

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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The Mozambique subsidiary of major Brazilian mining group Vale has given the assurance that the recent collapse of a coal stacker at the port of Nacala-à-Velha (Nacala) will not interfere with its coal exports from that harbour. The miner has also assured that the collapse of the coal stacker will not affect next year’s coal production. The stacker, a giant machine for the handling of coal or other bulk commodities, which was nearly but not quite completed, collapsed during the last week of July.

Vale operates the Moatize coal mine, in Mozambique’s western province of Tete. The mine has so far been hampered in its operations by logistical constraints and the new coal terminal at Nacala is part of a major project to overcome these bottlenecks, known as the Nacala Logistics Corridor (Corredor Logístico de Nacala, in Portuguese, abbreviated to CLN). In addition to the development of the new terminal at Nacala, this has also involved the refurbishment of 684 km of existing railway and the construction of 228 km of new railway for a reported total capital expenditure of $4.444-billion. The CLN runs through Malawi as well as Mozambique.

The company had originally hoped to start exporting its coal along the CLN but severe flooding damaged the line last year, forcing a delay. The coal stacker collapse is just the latest in a series of frustrating infrastructural problems that the company has faced. The current route it uses, from Moatize to the port city of Beira along the Sena railway, has also suffered flood damage in recent years.

Even when fully operational, the current capacity of the 575 km Sena line is woefully inadequate to match the nominal production capacity of Phase 1 of Moatize, even if Vale was the only miner seeking to use it – and Vale is not. Moatize Phase 1 has a capacity of 11-million tons a year (Mt/y). The current capacity of the Sena railway is just 6.5 Mt/y. And it also has to serve ICVL’s Benga and Jindal Steel & Power’s Chirodzi mines. This is a major reason why Moatize’s output during the first half of this year was only 2 424 000 t.

While the Sena line is being upgraded and will reach a capacity of 20 Mt/y by the end of this year, this will still be inadequate to meet the needs of the current three operational mines (let alone projected future mines in Tete). Moreover, Vale’s Phase 2 development of Moatize, already approved, will double the mine’s production capacity to 22 Mt/y. With the completion of the CLN, Vale (Mozambique news agency Aim reports) plans to increase Moatize’s production to 11 Mt/y next year. Full Phase 2 capacity should be reached in 2017.

Vale originally held 80% of the CLN but, as a result of a deal announced in December, the corridor is now owned 35% by Vale and 35% by Japan’s Mitsui, with the remaining 20% held, as before, by Mozambique State-owned ports and railways company CFM. Vale also sold 15% of Vale Mozambique to Mitsui, giving the Brazilian group 81% of the Mozambique operation, as its original shareholding was 95%.

Meanwhile, in a totally separate infrastructure development that will be of some benefit and convenience to mining and hydrocarbons companies operating in northern parts of Mozambique, the new Port Nacala International Airport should receive its certification by the end of this year. This will be about six months later than originally planned. The new airport will be able to handle airliners up to and including the Boeing 747-400 Jumbo jet, making it the closest major airport to the Tete coalfields, the Montepuez ruby deposits and the Balama graphite region, amongst others.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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