Brazilian diversified mining, lo- gistics and energy group Com-
panhia Vale do Rio Doce (CVRD) expects that its planned coal-mine
at Moatize in north-west Mozambique will come into operation in
2009.
On the back of Moatize and coal prospects in China the group
expects to be one of the world’s top five coal exporters by
2015.
CVRD was recently announced as the winning bidder for the
development of Moatize, with a bid of $122,8-million.
(Technically, the bid was won by a consortium of CVRD and American
Metals and Coal International of the US, but CVRD currently holds
95% of the consortium and its partner, which provides the coal
expertise CVRD lacks, the remaining 5%; however, as 10% of the
shareholding wlist of iron ore suppliers in pakistanill be made available to Mozambican investors,
CVRD’s share will probably reduce over time to 85%.) The
feasibility study for Moatize will start in January and should run
for 24 months. The prefeasibility study for the project has already
been concluded.
Meanwhile, the Brazilian National Bank for Economic and Social
Deve-lopment (BNDES) has confirmed that it is willing to provide
funding of up to $125-million for the roll aggreget crushing plantproject.
The State-owned bank is merely awaiting a concrete technical
proposal from CVRD; the BNDES has already sent a letter to CVRD
executives stating that a loan is possible.
Mozambique already has financial support from international credit
institutions like the International Fin-ance Corporation (IFC
– a subsidiary of the World Bank) and from regional
institutions like South Africa’s Industrial Development
Corporapart of grinding equipmenttion.
It is expected that the investment required to bring Moatize into
pro-duction will be about $1-billion (in-cluding the cost of the
concession).
Significantly, CVRD is describing this figure as representing
“preliminary investments”, which clearly implies more
will come.
Moatize will produce both coking and thermal coal and, currently,
CVRD plans to export the coking coal to Brazil to feed the
country’sheavy equipment for hire in botswana large and growing steel industry, and sell the
thermal coal to energy producers in Southern Africa.
Moatize’s reserves are esti-mated at 2,4-billion tons and the
mine is expected to have a pro-duction capacity of 21-million tons
run-of-mine annually. The Brazilian group’s logistics and
energy expertise will also be required for the project, as it will
require the construction of a maritime export terminal and a
coal-fired poweused truck mobile cone jawr plant of up to 1 500 MW capacity at the mine
itself.
(The railway linking the Moa-tize region to the ports of Nacala and
Beira has already been con-cessioned to Indian companies, although
CVRD may have to construct connecting lines and operate the coal
trains.) The costs of all this infra-structure are included in the
above- mentioned figure of $1-billion. In addition to the
undertaking to make 10% of the project available to Mozambican
investors, CVRD has committed itself to spend $6,5-million on
projects to benefit the Moatize communities during the exploration
phase, with such social spending probably rising to more than
$50-million in the years following the start of mining
operations.
The IFC considers that Moa-tize will “lead to sustainable
investment in Mozambique and make a significant contribution toward
poverty alleviation in the Zambezi region”.
Mozambican Mineral Resources and Energy Minister Castigo Langa
highlighted the very high technical quality of CVRD’s
proposal and its empowerment (to use South African terminology)
aspects.
The project also enjoys strong poli-tical support from Brazil
– the country’s Ministry of External Relations issued a
note about the awarding of Moatize to CVRD, which stated that the
Brazilian government regarded the decision “with
satisfaction”, adding that “the noteworthy presence of
CVRD in Moz- ambique constitutes an important mark in this new
phase in the relations between these two brother-countries and
acquires special significance in the context of the policies the
Brazilian government is developing in support of the priority
assigned by President Luiz In