The Nacala Integrated Logistics Corridor (CLN) hopes to move nine million tonnes of coal this year from the Moatize coal basin in the western Mozambican province of Tete to the northern port of Nacala-a-Velha.
This coal is carried along a new railway, some 900 kilometres long, from Moatize to Nacala-a-Velha which crosses southern Malawi.
Speaking at the signing of addenda to the Nacala Corridor lease contracts between the government, CLN and the Northern Development Corridor (CDN, which is responsible for the older Nacala port, on the opposite side of the bay to Nacala-a-Velha), CLN chairperson Renato Torres said that the amount of coal moved to Nacala-a-Velha could reach 14 million tonnes in 2017 and the maximum capacity of 22 million tonnes a year in 2018.
The coal comes from the giant open cast mine in Moatize operated by the Brazilian company Vale. CLN was initially set up by Vale (with 80 per cent of the shares), and by the Mozambican publicly owned ports and rail company, CFM (with 20 per cent). Subsequently, Vale sold part of its holding to the Japanese company Mitsui.
The addenda to the lease agreements seek to allow CLN to mobilise the further foreign investment (put at three billion US dollars) needed so that the railway and port can reach their maximum capacity.
A statement from CLN declared “we have strengthened our commitment to the development of the region and to the importance of this project for the integration not only of the centre and north of Mozambique, but also as an important link for connecting neighboring countries, such as Malawi and Zambia, to a deep water port in Nacala. These countries will benefit from improvements in the rail facilities”.
CLN believed that, with the new investments, Mozambique will be able to compete on a footing of equality with other countries in the export of minerals. “The state-of-the-art technology employed in the Nacala Corridor plus the use of trains of large capacity will make the coal from Tete highly competitive on the international market”.
The coal trains running between Moatize and Nacala-a-Velha are the longest in Africa, with four locomotives and 120 wagons. Unlike Beira, the other port used by Vale to export coal, Nacala-a-Velha does not need to be dredged. The port can receive ships of up to 180,000 tonnes, and since coal exports began in January 48 ships have picked up coal from the port.
Transport Minister Carlos Mesquita told the ceremony that the conditions now exist to increase coal production at Moatize, particularly in light of the recent improvement in coal prices.
The Friday signing follows a decision in principle by the government in June that CLN and CDN should be authorized to contract loans of up to three billion dollars. Of this sum, 1.9 billion will be invested in Mozambique, and the rest in Malawi.
The agreement does not create any financial obligation on the government, since the risks of the operations will be the responsibility of CLN, CDN and their shareholders.