Mozambique: Vale reports increased losses from coal mining operation in 2020

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Mozambique: Vale reports increased losses from coal mining operation in 2020

2:00 CAT | 09 Mar 2021

File photo: Lusa

The main coal mines in Mozambique in 2020 lost a third of production and over half of sales revenues, worsening losses compared to the previous year, according to data released on Tuesday by Brazilian company Vale in Maputo.

Total production for the year “stands at 5.9 million tons, reflecting the impacts of the Covid-19 pandemic”, the Vale statement reads. These results compare with a production of 8.8 million tons of coal in 2019.

According to Vale’s 2020 financial results, net coal sales revenue fell from US$1 billion in 2019 to US$473 million, a 54% drop.

The coal segment loss worsened by 74% from US$533 million in 2019 to US$931 million, according to adjusted operating results (EBITDA).

In addition to the impact of Covid-19, “production decelerated in the fourth quarter due to the start of the mining complex general maintenance project” in Moatize, Tete province.

Vale announced in January that it is looking for a buyer prior to quitting operations in Mozambique, but that it intends to deliver the mines at their highest possible production capacity.

Coal is one of Mozambique’s main export products, and Vale employs around 8,000 people, of whom close to 3,000 are its own workers and the remainder subcontracted.

Source: Lusa