CVRD expects to begin mining coal at Moatize in Mozambique within 3 years

29 January 2007

Sao Paulo, Brazil, Jan 29 – A major coalmining project at Moatize in central Mozambique is scheduled to begin within three years, the chairman of Brazilian mining company CVRD, Roger Agnelli, has said.

“I believe than Moatize will be operating within three years,” Agnelli said Friday on being questioned at a presentation of his company’s 2007 investment plans on the use of energy by CVRD from coal.

CVRD (Companhia Vale do Rio Doce) is currently waiting for the Maputo government to consider a viability study made by the firm on the Moatize venture, where there are an estimated 2.5 billion tons of coal.

“The Moatize project is running on schedule,” added the CVRD chief.

A final detailed study by CVRD on Moatize is to be concluded in April, said Agnelli and, “depending on the economic result,” the operation will begin. The head of the world’s second biggest mining company said he would meet Mozambican President Armando Guebuza next week for talks on Moatize’s projected production figures.

CVRD announced investments of US$ 6.33 billion for 2007 last week, an annual increase of 40.7 percent, some 72 percent, or US$ 4.6 billion, being for Brazil.

Of the company’s foreign investments, US$ 209 is destined for Mozambique and other African states, as well as Australia.

The Brazilian company has already invested US$ 80 million in Mozambique since 2004, when it beat off competition from BHP Biliton, Anglo-American PLC and the Rio Tinto Group to develop coalmines in the African country.

Some US$ 6.47 million of CVRD’s Mozambican expenditure has gone towards social programs in the cities of Tete and Moatize. Its chairman said the company “built hospitals, schools and developed social programs even before the start of the project because it pledged to carry out these schemes during the study phase.”

CVRD expects to achieve iron ore production in 2007 of just over 300 million tons, Agnelli said.

The Brazilian mining company has also announced it is to invest US$ 30 million to develop a coalmine in the Chinese province of Shandong with an annual production capacity of 3 million tons.

This project is being developed in a joint venture between Shandong Yankuang International Coking, in which CVRD acquired a 25 percent stake last year, and Japanese coal and coke company Itochu. (macauhub)