Brazilian mining major Vale is constructing its first significant mine in Africa, the Moatize coal project, in the province of Tete, Mozambique. The project has proven and probable reserves of 838 million tonnes and represents one of the world’s largest unexploited coal reserves. The mine will produce high quality metallurgical coal, i.e. hard coking coal, which trades at a premium over other types of coal.
The US$1.3 billion project will have a nominal capacity to produce 11 million tonnes of coal, of which 8.5 million tonnes will be metallurgical and 2.5 million tonnes thermal coal. Production start-up is expected in December 2010.
At Moatize, Vale is building what will be one of the world’s largest coal handling preparation plants at an operational site, with a capacity to process 26 million tonnes of coal a year.
Coal production from the Moatize mine will be transported by a railroad some 600 kilometres to a new maritime terminal at the port of Beira. The coal terminal will be built by a concessionary owned by the Mozambican government.
Vale’s investment in the Moatize project is in line with its growth strategy for its coal business, through which Vale aims to become, in the medium term, one of the largest global producers.
Currently, Vale produces metallurgical and thermal coal at its operations in Australia, in New South Wales – Hunter Valley – and Queensland – Bowen Basin –, and has two joint ventures to produce coal and coke in China. In December 2008 it acquired coal assets in Colombia, including a mine with nominal capacity to produce 4.5 million tonnes of thermal coal. Vale also has projects in different stages of development in Australia and Mongolia.