Brazilian miner Vale to spend $6 bn in expanding Moatize coal project

Brazil's Vale, the world's second-largest mining company, will spend $6 billion in expanding its Moatize coal project from the second half of 2014 in the former Portuguese colony of Mozambique.

The investment is aimed at increasing production from 11 million tonnes to 22 million tonnes per year.

With the expansion, the Moatize coal project would produce 70 per cent of coking coal, a key ingredient in making steel, and the remaining 30 per cent thermal coal used in power generation.

Vale started mining at Moatize in May and put up a processing plant, in July. Moatize is Vale's biggest project in the coal sector and has already invested $1.6 billion in the project.

The mine's output will be transported 600km along the Sena Railroad to a coal terminal at the Port of Beira in Sofala province.

The $6.5-billion investment will also include upgrading the rail corridor through Malawi as well as the associated new infrastructure for the Nacala deepwater port.