Mozambican government approves concession contract with Brazil’s Vale do Rio Doce

27 June 2007

Maputo, Mozambique, 27 June – The Mozambican government Tuesday approved the terms of the concession contract to be signed with Brazilian company Companhia do Vale do Rio Doce (CVRD) for commercial coal mining at the Moatize mining project, in the country’s Tete province.

At a meeting with journalists at the end of the Council of Ministers meeting, the government’s spokesman and Education Minsiter, Luís Covane, said that the concession contract was valid for a period of 25 years and was renewable and that construction of facilities would be concluded within 36 months.

“That means that in 2010 coal mining will begin in the Moatize area,” he noted.

The Moatize project, which has estimated coal reserves of 2.5 billion tons, represents an investment of US$1.5 billion for CVRD, US$170 million of which will be paid through the company’s reserves and the remainder obtained from investment banks.

Covane also said that the Council of Ministers had agreed that in the first five years of the project, 30 percent of the workforce will be foreign, which will then be reduced to 20 percent and at a later stage to no more than 10 percent. (macauhub)