Maputo — The Mozambican port and rail company (CFM) and the Brazilian mining giant Vale on Wednesday signed the agreement for the Nacala Logistics Corridor, the route along which Vale will transport its coal from Moatize, in the western province of Tete, to the port of Nacala.

Carrying coal by rail from Moatize to Nacala involves building a new railway across southern Malawi, and Vale has already reached agreement with the Malawian authorities on this.

Inside Mozambique, the Logistics Corridor involves upgrading the existing line from Malawi to Nacala, and building two new stretches of track, including the final stretch leading to the new coal terminal at Nacala-a-Velha, to be built on the opposite side of Nacala Bay from the current port.

The director of Vale-Mozambique Logistics, Ricardo Saad, told the Wednesday signing that Vale hopes that the new railway will be complete by the second half of 2014.

Saad said that this is one of Vale’s largest projects in Africa.

“It’s a challenge for us – it was not easy to consolidate a project of this nature”, he said. “It’s a dream that is coming true. It’s Vale’s largest infrastructure project in Africa. Naturally, it’s an impressive landmark”.

“It’s important that we have a clear vision”, he added. “Our target is that the first coal train is on the line by the second half of 2014. We have the responsibility to deliver the railway and begin operations on the line by that date”.

For his part, the chairperson of CFM, Rosario Mualeia, said the agreement will bring solutions to logistical problems. “This is the start of complex work between two brother peoples with different cultures”, he said. “Signing this agreement is a stage, not an end in itself”.

“In a contract like this”, Mualeia added, “there must be trust and mutual understanding”.

The agreement on the Logistics Corridor also defines the operational model to be used, and the fees schedule. Five concessionary companies are expected to take out leases on parts of the Logistics Corridor.