Mozambique: HCB increases production, delivers €187.2 million to the state
File photo
The Brazilian mining giant Vale on Thursday announced that production of coking coal from its open cast mine in Moatize, in the western Mozambican province of Tete, increased by over 153 per cent in the second quarter of 2017 compared with the same period last year. Production jumped to 2.05 million tonnes between April and June, representing a 92 per cent increase year on year.
In 2016, low coal prices forced Vale to make over two thousand of its workers in Mozambique redundant. As a result, the Moatize mine only extracted 5.5 million tonnes of coal. With the recent recovery in coal prices on the world market, Vale’s investment in Mozambique now looks like a profitable concern and the company expects to export eleven million tonnes this year.
Key to Vale’s coal being competitive is the Nacala Logistics Corridor, which was formally opened in May. This includes a 912 kilometre long railway running from Moatize to the new mineral port at Nacala-a-Velha. The corridor’s investment of 4.4 billion US dollars was funded by a consortium formed by Vale, the Japanese multinational Mitsui, and Mozambique’s publicly-owned port and rail company, CFM.
Although the corridor was formally inaugurated in May, it began operating in early 2016. However, the route is being increasingly used and within the next two years the railway and port are projected to reach peak capacity of 18 million tonnes of coal a year.
The competitiveness of Vale’s Mozambique operations was highlighted earlier this month when it was revealed that 70,000 metric tonnes of its metallurgical coal is to be shipped from Nacala to Port Kembla in eastern Australia.
The Platts new services noted that “the import of Mozambique coal is symbolic because Australia is the largest seaborne exporter of metallurgical coal in the world, the bulk of which is premium hard coking coal, prized for its high Coke Strength after Reaction”.
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