Mozambican government to intervene if Brazil’s Vale and India’s RITES unable to reach agreement

16 November 2010

Maputo, Mozambique, 16 Nov – The Mozambican government will intervene if negotiations between Brazilian mining company Vale and India’s RITES for use of the Sena railroad, the Minister for Transport and Communications said in Maputo.

According to daily newspaper Notícias, Paulo Zucula said that the process was still under negotiation and that only the interested companies were currently involved.

However, he gave assurances that the government was watchful and noted that, “at no point will we see the State’s interests affected and if the two companies cannot agree the government will intervene.”

The minister also said that talks had been underway with the Indian government with a view to altering the position of state group RITES in the management of the Sena railroad and in order to carry out a capital increase.

Last week, the chairman of Vale said in Maputo that the group was facing difficulties in its negotiations with India’s RITES for use of the Sena railroad to transport coal from Moatize, in Mozambique’s Tete province.

Speaking to Mozambican newspaper O País, after a meeting between Brazilian President, Luiz Inácio Lula da Silva and representatives of Brazilian companies operating in Mozambique, Roger Agnelli said there was “bad faith” on the part of the concession-holders of the Sena railroad.

The chairman of Vale noted that a lack of consensus with the Indian state company could affect the start of the coal mining project, in that initially only the Sena railroad will be available to transport coal produced at Moatize.

Agnelli noted that the disagreement was due to tariffs, which are allegedly impossible to bear, which the Indian company is demanding to ensure transport of the coal from Tete. (macauhub)