vale moving ahead with coal mine

Vale invests $250m in Mozambique coal mine


By: Reuters
Published on 17th November 2008

MAPUTO - Brazil's mining giant, Vale, the concession-holder on coal mining in Moatize, says it invested $250-million to reactivate mining in Mozambique's Tete province this year.

Vale, the world's top iron ore producer said in a statement that when it was granted the concession through a government tender in 2004, it paid over $123-million for the license, which will last 25 years. This year it has invested over $130-million.

"The company forecast 2010 and 2011 for the start of coal production, which, within a few years, would reach annual production of 40-million tons," Vale said.

The Moatize mine, which suffered extensive damage during Mozambique's civil war in the 1970s and 1980s, is believed to hold about 2,4-million tons of coal reserves, making it one of the largest untapped deposits in the southern hemisphere.

As well as Vale, there are 42 companies in Mozambique that hold coal licenses, 95% of which are based in Tete, located 1 700 km north of the capital Maputo in Tete and the remainder in Niassa province.

The Brazilian-led consortium expects to begin production in 2010, with estimated annual output of about 12 million tons of coal.

Some of the production will fuel a 2 000 MW thermal power station in Mozambique, with the rest mostly destined for export. The project includes a 900 km railway linked to a deep water port.

Moatize is the latest project designed to diversify Mozambique's fast-growing economy, which is heavily reliant on agriculture and tourism.


When with RIV share price turn????

Cheers, Skip.