8 June 2016

Mozambique: New Investments Planned for Nacala Railways

Maputo — The rail corridor from the northern Mozambican port of Nacala-a-Velha to the Moatize coal basin in Tete province will receive three billion US dollars of new investment to boost its capacity to transport the coal produced in Moatize, according to the Mozambican government spokesperson, Deputy Health Minister Mouzinho Saide.

Speaking on Tuesday at the end of the weekly session of the Council of Ministers (Cabinet) he said that 1.9 billion dollars will be invested in Mozambique and the rest in Malawi.

Saide added that the Council of Ministers approved a direct agreement between the government and the two main rail and port leaseholders in the north, the Northern Development Corridor (CDN), and the Nacala Integrated Logistics Corridor (CLN). He said the agreement is needed to allow CDN and CLN to obtain the loans needed for the planned improvement in rail facilities.

“The agreement does not create any financial obligation on the government”, he added, “since the risks of the logistics operation will be the responsibility of the leasing consortium and its components, notably Vale and Mitsui”.

CLN runs the coal terminal at the new port of Nacala-a-Velha, built on the opposite side of Nacala Bay to the previously existing port of Nacala, and the 900 kilometre long railway from Moatize to Nacala-a-Velha, which runs across southern Malawi. CLN is a consortium between the Brazilian mining company Vale, the Japanese company Mitsui and Mozambique's publicly owned port and rail company, CFM.

The new investments, Saide said, will significantly increase the capacity of the line which, in 2015, was capable of carrying 22 million tonnes of cargo a year.

The government has also authorized the sale of all the shares held by CFM in CDN, CLN and in Central East African Railways (CEAR), which runs the Malawian rail network.

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