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Brazil’s Vale invests 2 billion USD to develop Mozambique vast coal reserves

Monday, May 9th 2011 - 18:59 UTC
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Mozambican President Armando Guebuza at the opening of Moatize mine complex Mozambican President Armando Guebuza at the opening of Moatize mine complex

The world’s largest iron-ore producer, Brazil’s Vale will double investments in Mozambique to 4 billion US dollars in the next four years, said on Monday Chief Executive Officer Roger Agnelli.

The Rio de Janeiro-based company invested 2 billion USD since it acquired the Moatize coal mine in 2004, said Agnelli in Tete province, 2,000 kilometres north of the capital Maputo.

Vale started operations at the 1.7 billion USD Moatize this weekend and is expected to produce 11 million metric tons of metallurgic and thermal coal a year once fully operational, the company said. Moatize employs 7,500 workers and its coal will be transported along a 600-kilometer railway line to the port of Beira in central Mozambique.

Vale plans to set up a coal-to-liquid plant in Mozambique, Agnelli said, declining to give more details. The southern African country’s government supports the plan to produce fuels from coal, said Mineral Resources Minister Esperanca Bias.

“We want to add value to coal produced in the country,” she said in an interview. “But first we have to see how the project is operating”.

Mozambican President Armando Guebuza presided over the inauguration ceremony Sunday in Moatize. The former Portuguese colony of Mozambique has billions of tons of coal reserves, but until now they have been largely untapped.

Later this year, India's Tata Steel and Australia's Riversdale Mining are expected to jointly open another major coal mine in nearby Benga.
 

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