Vale halves 2012 coal output

Brazilian mining giant, Vale, has nearly halved its output and export target at its Moatize Coal Mine in Mozambique for 2012 from 4.6 million to 2.6 million tonnes due to limited capacity on the railway connecting the mine with the Beira Port, a senior official has said.

Vale, which acquired 67 percent stakes in Central East African Railways (Cear), embarked on coal production at Moatize last year.

Operations director at Vale Mozambique, Altiberto Brandao, was quoted by Reuters on Wednesday as saying the company cannot produce at its full capacity while they still have transport limitations.

He said Vale expects to export about five million tonnes of coal come 2013, upon completion of the upgrade of the Sena Railway Line.

The upgrade of the rail line, which links the port of Beira with coal mines in central Tete Province, had been delayed for years and was expected to be completed this year.

Once upgraded, the Sena Rail Line will be capable of carrying 6.5 million tonnes of coal per year, up from two million tonnes now, before being expanded further.

“We believe that the line will be ready by the end of the year and from there, we will upgrade our production and export levels to 4.9 million tonnes in 2013,” said Brandao.

Vale is investing heavily to increase the mine’s annual capacity to 11 million tonnes and plans to double that in the second phase of the project.

Brandao said Vale would only increase capacity beyond the 11 million tonnes after the completion of the Nacala Railway and Port Project in northern Mozambique, which will allow the company to send bigger quantities of coal.

“The ramp up only makes sense with Nacala Corridor in operation, so before that, we can only concentrate our operation on the 11 million tonnes capacity,” he said.

Vale is the sole concession holder on the rehabilitation of the railway line from the coal rich Tete Province—where its $2.5 billion Moatize mine is situated—to Nacala, a port in the north of Mozambique which is considered more suitable for heavy vessels.

Vale hopes that the Nacala line can be rehabilitated and extended to take a capacity of 18 metric tonnes per annum by late 2014.

In the country, expectations are high that Vale will make tremendous improvements in the rehabilitation of both tracks and locomotives following its acquisition of majority share in Cear.

Vale’s biggest interest is the exploration of Moatize Coal Mine in Mozambique’s Tete Province. The company plans to reach the market for its coal using the port of Beira and Nacala in Mozambique and Shire Zambezi Waterway.