8 November 2012

Mozambique: Vale Revises Coal Export Forecast Downwards

Maputo — The Brazilian mining giant Vale has revised downwards its forecast of the production and export of coal from its open cast mine at Moatize, in the western province of Tete.

Data announced on Wednesday by the Vale management cut the figure for coal exports this year from 4.9 to 2.6 million tonnes, due to the logistical shortcomings of the Sena railway line that runs from Moatize to the port of Beira.

“Our latest forecast is 2.6 million tonnes, which is a great reduction when compared with our initial forecasts”, said the Vale-Mozambique Director of Operations, Altiberto Brandao, during a visit by a group of journalists to Moatize.

“We have had to re-adjust our production targets taking into account that the capacity to move the coal unfortunately remains limited by the capacity of the Sena line”, Brandao said.

The Sena line was comprehensively sabotaged by the South African backed Renamo rebels during the war of destabilisation. The reconstruction of the line was in the hands of the Indian consortium Rites and Ircon International (RICON), which botched the job, while the funding agency, the World Bank, though alerted to the problems by the independent engineer, took no corrective measures.

The Indian consortium failed to complete the reconstruction by the agreed deadline, and eventually the Mozambican government had little option but to cancel the contract with RICON. The job of finishing the Sena line was left to Mozambique’s own port and rail company, CFM, which expects to complete the task by December.

Brandao was optimistic that this would indeed happen, and that in 2013 Vale will be able to move 4.9 million tonnes of coal along the Sena line.

Vale expects to be producing 11 million tonnes of coal a year at Moatize by 2014. A second mining phase will then begin, doubling production to 22 million tonnes a year. By then, Vale hopes that it will have built a new railway across southern Malawi, which will link up with existing northern corridor from Malawi to the port of Nacala. As from 2015, Vale hopes to be exporting the bulk of its Moatize coal from Nacala.

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