Brazil’s Vale to use part of Malawi’s rail system to transport coal from Mozambique

20 April 2011

Maputo, Mozambique, 20 April– Brazilian mining group Vale and the Malawian government Monday signed a document for use of Malawi’s rail system as part of the construction of a railway to transport coal mined at Mozambique’s Moatize project, Mozambican newspaper Notícias reported.

The memorandum of understanding, which was signed in the Malawian capital, Lilongwe, is part of the construction of a railway line between Moatize, in Tete province, central Mozambique, and the Mozambican port of Nacala in the north, via the shortest route, which crosses southern Malawi.

The project aims to overcome problems that have come up with the Sena railway line, between Moatize and the port of Beira, in central Mozambique, which is not able to transport the large amount of exports that Vale and other mining companies working in the region are expected to carry out.

The railway line to Nacala, which is expected to cost 1.5 billion euros, will be 900 kilometres long and pass through Malawi making use of the existing rail infrastructure.

Since studies began for mining coal at Moatize Vale has always maintained the possibility of building a railway line to transport the coal, although it later gave up on the idea because it was more expensive than using the Sena line.

In the middle of the project to rebuild the Sena line, Vale became part of the shareholder structure of Corredor do Norte (Northern Corridor), which was a clear sign it had reconsidered its decision to give up the idea of transporting coal via Nacala.

Vale is expected to start exporting coal in the next few months.

At its peak of production the Moatize project is expected to have a nominal production capacity of 11 million tons of coal per year, of which 8.5 million tons will be metallurgical coal and 2.5 million tons will be thermal coal.

As part of its investments in Moatize Vale is building one of the biggest coal processing units in the world, with capacity for 26 million tons per year, an amount that makes it possible to expand the project at a later date. (macauhub)