Cape Town, South Africa — 08 February 2013 – The government of Mozambique and the world’s second-largest mining company plan to work together in an effort to find solutions to the transport and infrastructure problems that are plaguing the movement of coal from the Tete province to the coast

Bloomberg News reports that Mozambique mineral resources minister Esperanca Bias has confirmed that her government is in ongoing talks with mining giant Rio Tinto about the infrastructure issues hampering the company’s Mozambique coal project.

“We have constraints when we talk about infrastructure “’ not just for Rio Tinto but also other companies “’ and not only for coal but for other commodities as well,” she told reporters at the Mining Indaba here. “But I believe we as a government, together with the private sector, can succeed. And as far as I know, Rio Tinto is going to help the government to find a solution for transport also,” the minister continued.
Rio Tinto’s problems in Mozambique were dramatically revealed last month when the company wrote down the value of its coal assets there by US$3 billion. The company had spent US3.8 billion acquiring the assets through its takeover of Australian-listed Riversdale Mining only 18 months earlier.

It has blamed the write-down of the Riversdale assets on the realisation that the project contains less high-value coking coal than first thought, and on its struggle to identify a suitable infrastructure solution for the project.

Meanwhile Rio Tinto has confirmed that it is in talks with the Mozambique government as it seeks a new plan to enable coal exports from its project in the country.

Brazilian mining giant Vale is faring better with its coal project in Mozambique. Its global head of corporate affairs, Rafael Tiago Juk Benke, told the conference that the company was ramping up production at its Moatize mine to 4.5Mtpa.

Minister Esperanca Bias is of the opinion that Rio Tinto and Vale SA should consider jointly developing a rail link to haul coal from Mozambique’s north-western Tete province to the eastern port of Nacala.  

“It is our desire, and we believe that the companies will share information and will share capacity that will be available,” she said. “That includes Nacala and other railways that will be built. It’s in our strategy that lines for any product are for free access for other products. It wouldn’t make sense to have a line dedicated only to one product,” she continued.

Vale, the world’s largest iron-ore producer, is investing US$4.4 billion in upgrading the port of Nacala and building a 912km railway line linking it to its mines in the Moatize basin,” said  Benke.

Mozambique’s government will take a stake in all proposed new rail projects in the country.

Source: Bloomberg News and “The Australian”. For more information, click here.