17 January 2018

Mozambique: Heavy Costs for Cfm in Vale's Switch Away From Beira

Maputo — The decision by the Brazilian mining company Vale to stop using the Sena railway line from its mine in Moatize, in Tete province, to the port of Beira, is costing the Mozambican publicly owned port and rail company, CFM, 45 million US dollars a year, according to the executive director of the central division of CFM (CFM-Centro), Augusto Abudo, cited by Radio Mozambique.

Vale has switched all its coal exports to the northern port of Nacala-a-Velha. This was only to be expected since Vale largely paid for the new railway from Moatize to Nacala-a-Velha, across southern Malawi, and for the new Nacala coal terminal.

A key factor is the capacity of the two ports. Beira needs to be constantly dredged, and its access channel can currently only accommodate ships of up to 40,000 tonnes (although when the current dredging is complete in April, this figure should rise to 60,000 tonnes). The Bay of Nacala, however, is generally considered the best natural harbour on the east African coast. It requires no dredging, and so the Nacala-a-Velha mineral port can take ships of any size.

Furthermore, the Sena line can only carry six million tonnes of coal a year, whereas Vale expects to export 18 million tonnes a year using the Moatize-Nacala line.

Abudo said the greatest challenge facing the Sena line is to find other customers who can replace Vale. “We have lost a great supplier of merchandise using this railway”, he said. “It is our obligation to make an effort to recover other clients, and our commercial and operational areas are working towards this end”.

He added that CFM is looking into the possible reactivation of the spur that links the Sena line to Vila Nova de Fronteira, on the border with Malawi, so as to attract more Malawian users back to Beira.

Abudo said that the planned rehabilitation of the Beira-Zimbabwe railway will cost at least 150 million US dollars. The annual capacity of the line is 1.5 million tonnes of cargo, but due mainly to the economic crisis in Zimbabwe, recently it has only been handling around 200,000 tonnes a year. CFM-Centro hopes this year the amount can be increased to 400,000 tonnes.

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