The Mozambican Minister of Mineral Resources and Energy said on Monday that about 20 companies are interested in buying Brazilian company Vale’s coal mine and logistical corridor in Mozambique, ensuring continuity of the activities.
“The investment banks hired by Vale [to run the business] have already enlisted a group of about 20 companies potentially interested in the operation,” Max Tonela said.
Max Tonela said that Vale’s replacement operation at the Moatize mine in Tete province, central Mozambique, and the Nacala Logistic Corridor (CLN), could be extended until December this year.
The process of a new operator taking over the mine and logistics corridor would be conducted so as to ensure that the new company was equal to or better than Vale, he added.
“Vale will appear [before the Government] with one or two candidates who will replace it, always ensuring that whoever replaces Vale will be an equal or better operator than Vale, from the technical standpoint, and also [as regards] financial strength,” Minister Tonela stressed.
The minister guaranteed that, until a new operator entered the business, the activities of the Moatize mine, the CLN and the planned investments would continue.
“The entire investment process to increase the processing capacity that had already started will be concluded at the end of this month. This will give Vale, from the second half of this year, a production capacity of at least 15 million tons of coal per year,” Minister Tonela said.
The increase would give the mine a possible production of 18 million tons of coal per year, from 2022, he added.
“The maximum that the project had reached was around 11 million tons per year. The new capacity will allow the project to generate enough income to cover costs,” he maintained.
The Minister of Mineral Resources and Energy said that the process of divesting Vale’s holdings in Mozambique would follow the completion of the sale of Japanese Mitsui’s shares in the venture to the Brazilian company.
Vale’s departure from the Moatize mine and CLN materialises the decision to divest in the coal business in Mozambique announced by the company in January.
Coal is one of Mozambique’s main export products, and Vale employs around 8,000 people, 3,000 of them its own workers and the remainder via subcontractors.
Earlier this month, Vale announced the loss of a third of production and more than half of sales revenue, aggravating losses in 2020 compared to the previous year.
Total production for the year “stands at 5.9 million tons, reflecting the impacts of the covid-19 pandemic”, after a production of 8.8 million tons in 2019, the company said in a statement.
According to Vale’s financial results for 2020, net revenue from coal sales fell from US$1B in 2019 to US$473M, a fall of 54%.