Vale nears deal to sell stake in Mozambique's Moatize coal project to Japan's Mitsui
16 March 2017
Brazilian mining giant Vale SA yesterday said that it is nearing a deal to sell a stake in Mozambique's Moatize coal project to Japan's Mitsui & Co Ltd.
Vale expects to receive about $770 million after the completion of the sale, and raise up to $2.7 billion upon closing of the Project Financing.
The completion of the stake sale is expected by the end of March 2017, when Vale will receive $733 million, with the remainder amount to be received upon closing of the Project Financing.
Mitsui is buying a 15-per cent stake Moatize coal project from Vale and also 50 per cent of Vale's 70-per cent stake in the Nacala railway project that connects the mine to the Nacala port in Mozambique.
In 2011, Vale, the world's third-largest mining company, said that it would 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.
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.
The Nacala Corridor project has an estimated nominal capacity to handle 18 million mt/year of coal, with potential to reach 30 million tonnes per year in the future through a 912km railroad and a new maritime terminal able to handle Capesize vessels without transshipments.
Present in Mozambique since November 2004, Vale holds concession for one of the biggest coal reserves in the world in Moatize, Tete Province, in the northwest of the country.
Vale, which is already the world's biggest iron ore miner, plans to become a major global player in the coal sector through its Moatize Coal project.