Brazil’s Vale do Rio Doce to decide on investment in coal mining in Mozambique by year’s end

14 September 2006

Sao Paulo, Brazil, 14 Sept – Brazilian mining giant Companhia do Vale do Rio Doce (CVRD) is to decide by December on whether to invest US$1 billion on coal mining at at Moatize, Mozambique, a company spokesperson told Macauhub in Sao Paulo.

The company’s engineers are due to finish the feasibility study for the Moatize facility, which is considered to be the world’s largest un-mined carboniferous region.

In November 2004 CVRD won an international tender for exploration of the mines at Moatize, with an offer of US$122.8 million in partnership with US coal producer American Metals and Coal International, which provided 5 percent of the capital.

Despite having won the tender, CVRD has said it has not made a final decision.

CVRD spokesperson, Fátima Cristina told Macauhub that the US$1 billion investment, if it is made, would include payment of the concession, the development of the mine, construction of a ship-loading terminal and social projects.

Cristina also said that the company would not make any announcements about transport and other structures related to Moatize while the feasibility study, which has been underway since January 2005, was not concluded.

In order to transport the coal to the coast, the company has two possibilities: The Moatize railroad that ends at Nacala port, passing through Malawi, and the Sena railroad, which stretches from Moatize to Beira port, both of which are under concession to private companies.

The only project CVRD has confirmed in the Moatize region are social programs, with a total investment of US$6.4 million and which are expected to be put into place by the end of the year, at the same time as the company will announce its decision. (macauhub)