Mozambican government concerned about drop in coal prices

23 July 2014

The Mozambican government is analysing solutions with companies to overcome the drop in price of a number of raw materials, such as coal, but does not plan to reduce taxes for the sector, the Mining Resources Minister said Monday.

Speaking to financial news agency Reuters, Minister Esperança Bias said she understood that companies such as Brazil’s Vale and Rio Tinto, which have put Mozambique on the coal export map, had been affected by a drop in world prices of both coking and thermal coal.

Vale Moçambique recently announced a loss of US$44 million in the first quarter, and its director, Pedro Gutemberg, said that the company would have to reduce costs in the short term in order to remain competitive.

On the sidelines of a coal conference in Maputo the minister said the government was aware of the problem, “we are analysing what our contribution can be,” but added she did not agree that reducing taxes would resolve the issue.

“I think the tax system does not need to be modified in order to reduce taxes on the mining sector,” she said.

At the conference Pedro Gutemberg said that Vale remained focused on Mozambique and announced that the first train linking Moatize, the capital of Tete province, to the port of Nacala, in Nampula province, would start running by the end of the year. (macauhub/MZ)