Maputo, Mozambique, 21 May – Japan’s Nippon Steel said Tuesday it planned to invest in the coal mine that Brazil’s Vale do Rio Doce is building in Mozambique’s Tete province, at an estimated investment of US$1.4 billion.
Shoji Muneoka, who took on the chairmanship of the Japanese company in April, said that he had already informed Vale, the world’s biggest iron ore exporter, of his interest in the Mozambican mine.
In April NIppon Steel, the world’s second largest steel manufacturer, warned that its net profit would fall to a five-year low in 2008, due to the fact that the price of raw materials was not entirely reflected in end customer prices.
In July, the Mozambican government officially granted coal mining rights for Moatize to Vale do Rio Doce with estimated reserves of 2.5 billion tons, for 25 years.
The Brazilian mining company hopes to mine 8.5 million tons of coke for the metals industry and at least 2.5 million tons of coal for power production.
With total investment estimated at US$1.398 billion, the Moatize mine is expected to start production in the first quarter of 2011.
Since the start of the year coal price have risen three-fold, hitting a record high.
“In these extraordinary circumstances of high prices of raw materials, we have great interest in alternative sources,” said Muneoka. “We want to invest if we have opportunities,” he noted. (macauhub)