Sao Paulo, Brazil, 1 Nov – Brazil’s Vale mining company plans to invest between US$15 billion and US$20 billion in projects in Africa in the next five years, nearly ten times as much as it has spent to date on the continent, and Mozambique will be one of the priorities.
The company – the world’s biggest iron ore producer – indicated last week that it hopes the investments will also make it one of the three top copper producers on the continent, where there are abundant reserves of that mineral. It will also mine iron and coal.
Vale president Roger Agnelli disclosed the information when the company announced a record quarterly profit of 10.5 billion reais (US$6 billion).
The company’s total investment in 2011 will be the biggest ever: US$24 billion, nearly double what is planned until the end of 2010.
Agnelli said the investments would be “fully” financed by the company’s capital, with no need for recourse to credit.
In Africa, Vale is focusing its main investments on Mozambique, Zambia, Guinea-Conakry and Liberia.
It is also paying attention to opportunities in the Democratic Republic of Congo and Angola, especially for copper production.
Some US$2.5 billion have been invested on the continent to date, but almost all on exploration, so the margin for improvement is large.
Vale recently revealed that the basic structures that will enable it to begin exploiting coal in Moatize, Mozambique, are nearly 75 percent completed.
Coal extraction should begin by the end of the year, after a US$1.3 billion investment, with the first exports due in July 2011.
Vale began operating in Moatize in 2004, when it won the tender to carry out feasibility studies at the site located more than 1,700 km north of the Mozambican capital Maputo.
In 2007 it was granted permission to operate and the following year began work on the mine.
Parallel to this, the Mozambican government and Vale are studying the possibility of using the methane gas released during the coal extraction process to produce electric power.
Mozambican Deputy Minister for Mineral Resources Abdul Razak told the Noticias newspaper this month that “it is not yet known whether the power will be used for the national public grid or for the mining company’s own internal consumption.”
The feasibility study should be conducted with the help of Indian partners, he added.
Vale is also interested in exploiting phosphate reserves in Nampula province and should begin the economic feasibility study in 2011, although extraction is unlikely to begin before 2014.
The Vale mining company overtook the oil company Petrobras this year to become the biggest Brazilian exporting company, indicate figures released in Brasilia by the Ministry of Development, Industry and External Trade. (macauhub)