Industry

More from Moatize

Key Mining Developments

Ambitions are high to expand the production of Tete Province's mineral resources, as nationwide transportation endeavors to connect Moatize with main ports are underway.

The forthcoming Nacala Port is expected to play a particularly important role in the growth of Mozambique’s mining industry, as the terminal is being built with the capacity to handle 18 million tons of coal on an annual basis. According to local reports, both the port of Beira and the port of Nacala will receive coal from the nation’s most important coal basin—Moatize in Tete Province—by the end of 2014. In total, the Moatize—Nacala line will run for 912 kilometers, with the bulk of construction and rehabilitation work completed by the end of 2014. Vale’s investment in the port is expected to total more than $1.2 billion and the entire project could create up to 3,500 jobs.

Meanwhile, the railways connected to Moatize are being designed to boost capacity to 40 million tons per year, 30 million of which will have direct links to coal mined in Moatize and be reserved for Vale. The remaining capacity will be available to other companies or individuals seeking to transport mineral resources to hubs on the Indian Ocean. In response to rapidly improving mining infrastructure, multinational companies operating in Tete Province have embarked on projects to ramp up production. Beacon Hill Resources, Vale, and Rio Tinto are spearheading the development of coking and thermal coal reserves, with local player Ncondezi also in on the action at its Zambezi coal basin to the northeast.

Since acquiring 100% of Minas Moatize Limited in December 2010, Beacon Hill Resources of Mozambique has worked to increase its production levels to 920,000 tons of coking coal and 850,000 tons of exported quality thermal coal from the mine per annum, with production expected to reach full capacity in 2013. In total, the company expects its section of Moatize to yield 57 million tons of coal over the 15-year life of the mine. Combining the experience and knowledge transfer from other operators in the area, such as British-Australian Rio Tinto and Vale, Beacon Hill Resources commenced the open-pit mining of thermal coal from an initial zone in 2012. The coal the company produces is being processed at Minas Moatize’s Wash Plant. In early January 2013, Vale announced that it had run 1,000 coal trains from its section of the Moatize mine during 2012, activity that has increased the standing of the country in the global metallurgical coal market and grown almost nine fold compared to the previous year. In the period between the start of operations at Moatize until the end of 2012, Vale exported more than 2 million tons of Mozambican coal. With coal export targets pegged at 4.9 million tons for 2013, Vale is working with state port and rail company CFM to overcome the logistical difficulties and increase capacity. By 2015, the company hopes to benefit from boosted efforts to improve the Sena line, which is the only railway that carries coal mined in Tete province to the port of Beira on the Indian Ocean.

In early 2013, Vale announced that work had started on the construction of a new 137-kilometer railway line from Moatize to Chikhwawa, crossing the border into southwest Malawi. This is part of a program to create an alternative coal export line for Moatize, which will run through Malawi to the Mozambican port of Nacala. Furthermore, Central East African Railways, in which Vale is the majority shareholder, is planning to renovate up to 100 kilometers of railway line crossing Malawi’s eastern border with Mozambique.

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