Brazilian mining group Vale has reported new production records by its coal operation at Moatize, in the Tete province of Mozambique. Since the disposal of its last Australian coal operation, Carborough Downs, in late 2016, Moatize has been the group’s only coal project. Moatize is run by a subsidiary company, Vale Moçambique, which is majority-owned by the Brazilian parent, with Japanese and Mozambican minority shareholders.
“Coal production totalled 11.3 Mt (million tons) in 2017, 56.0% higher than the 7.2 Mt in 2016, as a result of the ramp-up of Moatize [Phase] II, partly offset by the divestment of the Carborough Downs operations in November 2016,” stated the group in its ‘Vale’s Production and Sales in 4Q17’ report. “[The year] 2017 was the first year with [coal] production exclusively at Moatize, with the volume at that site increasing by 105.0% from 2016 levels.” Moatize’s 2017 output was 105% higher than its 2016 figure.
The production figure of 11.3 Mt was, however, lower that the forecast of 11.7 Mt made during the ‘Vale Day 2017’ presentation late last year. This was the result of a failure in one of the hydraulic excavators during the last quarter of 2017. This failure has already been rectified.
The failure of the hydraulic excavator meant that the production figure for the fourth quarter of last year (4Q17) was, at 2.6 Mt, 19.8% lower than that for the third quarter (3Q17), which was 3.2 Mt. However, 4Q17 production was 49% higher than 4Q16 production. Again, this increase was the result of the ramp-up of Moatize II, partially offset by the disposal of Carborough Downs. Production at Moatize alone increased by 62.5% in 4Q17, compared with 4Q16.
Primarily a metallurgical coal operation, Moatize also produces thermal coal. During last year, the mine’s output of metallurgical coal came to 6.95 Mt, and of thermal coal to 4.3 Mt. Compared with 2016, this represented a 99.8% increase in metallurgical coal production and a 114.1% increase in thermal coal production.
With regard to quarterly output, 4Q17 production of metallurgical coal was 1.4 Mt, down 23.4% on 3Q17 but up 41% on 4Q16. Thermal coal output in 4Q17 was 1.2 Mt, a decline of 14.9% in relation to 3Q17 but a jump of 100% over 4Q16. The 4Q17 production falls were due to the failure of the hydraulic excavator.
That thermal coal formed a higher proportion of the mine’s output during 4Q17 was the result of the geological characteristics of the coal fed into the coal handling and processing plants (CHPPs) – it had a higher ash content – and the processing of the rest of the thermal coal stockpile in CHPP I. The company expects the proportion of metallurgical coal in the mine’s production to return to between 60% and 65% as a result of access to lower ash content coal and the execution of improvements in the coal preparation processes during this year.
“Coal sales reached 11.780 Mt in 2017, 13.7% higher than in 2016, with metallurgical coal sales increasing 46.3% in 2017, whereas thermal coal sales decreased 15.7% in the same period,” said the company in its report. “[The] thermal coal sales decrease was due to [the] high level of sales in 2016, as the ramp-up of [the] Nacala Logistics Corridor [railway] enabled [us] to draw down accumulated inventories of thermal coal produced in 2015.”