15 March 2014

Mozambique: Nacala Integrated Logistics Corridor Launched

Maputo — The first trainloads of coal along a railway from the Moatize coal basin through Malawi should reach the new port of Nacala-a-Velha in northern Mozambique in September.

The government has signed a concession on the new port and on coal traffic along the railway with the Integrated Nacala Logistics Corridor (CLN), a consortium that is 80 per cent owned by the Brazilian mining giant Vale, and 20 per cent by Mozambique's publicly owned port and rail company, CFM.

At a Maputo ceremony launching CLN, consortium officials said the entire project is costing 4.4 billion US dollars. The coal terminal at Nacala-a-Velha, built on the opposite side of Nacala Bay from the existing port of Nacala, will be able to export 18 million tones of coal a year.

The railway runs for over 900 kilometres, and CLN's projections are for about 20 coal trains a day. This will require a fleet of 100 locomotives and 2,700 wagons. 12 ships a month are expected to call at the coal terminal.

Vale opted for a new port and railway when it became clear that the existing Sena line, from Moatize to the port of Beira, could not possibly cope with the forecast coal exports. Even with planned upgrading, the capacity of the Sena line is no more than 12 million tonnes a year. But within the next few years the potential coal exports from the Moatize basin could reach 100 million tonnes a year.

Transport Minister Gabriel Muthisse noted that the existing railway from Malawi to Nacala is only handling around two million tonnes of cargo a year. With the new port at Nacala-a-Velha and the CLN investments in the railway, there will be a dramatic increase, and Muthisse believed that in the near future the line will be carrying 24 million tonnes of coal and cargo.

A different consortium, the Northern Development Corridor (CDN) already holds the concession on the railway for general traffic, and Muthisse pointed out that the two consortia will have to work together.

He warned that “the markets are very demanding and we are not the only suppliers. The coal chain of value goes from the mine right up to the final destination. It is no good extracting the coal efficiently at the mine, if there is no efficiency along the railway and at the port”.

Any lack of transport efficiency “and Moatize coal will lose its competitiveness”, Muthisse said. “Not a single kilo of coal should remain heaped up at Moatize. This depends on the operations of the railway, the port and the shipping companies”.

The same held true for copper from Zambia, or from the Democratic Republic of Congo. That was cargo that could use Nacala - but only if the transport system was efficient and competitive. Otherwise, warned Muthisse, exporters of the copper might prefer to use Durban, Dar es Salaam, or even Mombasa.

Vale officials told AIM that work on the railway will be complete by September. It has involved a new rail link to connect Moatize to the Malawian rail system, and major upgrading to the Malawian part of the line. The railway enters Mozambique again at Entre-Lagos, and the 77 kilometre stretch between Entre-Lagos and the city of Cuamba is being effectively rebuilt. There is also an entirely new stretch of line branching off the existing rail corridor and reaching the Nacala-a-Velha coal terminal.

Pf/ (572)

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