Rio de Janeiro, Brazil — MININGREVIEW.COM — 30 June 2011 – Brazilian mining giant Vale has raised its initial production target for the Moatize coal mine in Mozambique by 76% and expects to quadruple that result in 2012.
Moatize, “’ described as the Southern Hemisphere’s largest coal project “’ is expected to produce 1.5Mt in 2011, and output will rise to 6.3Mt in 2012, sales manager Marcelo Matos said during an industry conference in the Brazilian capital.
The company’s previous Moatize estimate for 2011 was for 850,000t. Vale plans to start supplying its clients in October, and most of the output will be coking or metallurgical coal used in steelmaking.
“Our objective is to begin testing the product with clients as of October this year, and to begin production on a large scale next year,” Matos said.
Vale, the world’s largest iron-ore producer, is expanding its coal mining business to increase the range of products it can offer to steelmakers, who are its main clients, and to increase the efficiency of its transport systems. Ships emptied of iron-ore in Asia can be filled with coal in Mozambique for return journeys to Brazil and other steelmaking markets.
Coking coal is used to remove oxygen from iron-ore and provide the carbon for the carbon-iron alloy that is steel. Vale has also made itself the world’s largest nickel producer to supply steelmakers with the metal that makes stainless steel rustproof.
During the first phase of the Moatize project, production is slated to reach 11Mtpa. About 8.5Mt, or more than three quarters of output, will be metallurgical coal. The rest will be softer thermal coal burned in power plants.
The company plans to spend US$422 million on the project in 2011.
A second phase, beginning in 2014, is expected to double output to 22Mtpa.