Vale's Massive Mozambique Coal Mine to Take 250 Megawatts from Moatize Power Project

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Moatize independent power producer (IPP) project in Mozambique will be developed on a build, own, operate and transfer (BOOT) basis and will be a pulverized fuel, subcritical coal-fired power station. In the first 300-megawatt (MW) phase of the project, about 250 MW will be supplied to the coal mine, which is being developed by Vale S.A. (NYSE:VALE) (Rio de Janeiro, Brazil). The site will host the biggest such operation in the world. Any surplus power will be fed to the national grid of Electricity de Mozambique (EDM) (Maputo).

The government has approved a 25-year concession for the construction of the Tete province plant, which could have its final capacity raised to 600 MW. The power plant will be constructed and managed by ACWA Power Moatize Termoelectrica (APMT), a consortium that includes Vale, Mitsui (OTC:MITSY) (Tokyo, Japan) and ACWA Power (Riyadh, Saudi Arabia). EDM and local investor Whatana Investment Group will be in the consortium as minority shareholders in the $1 billion project, which has been in the pipeline for some years.

GS Engineering & Construction (KSX:006360) (Seoul, South Korea) has been awarded the engineering, procurement and construction (EPC) contract. ACWA's wholly owned subsidiary will be responsible for the operation and maintenance of the plant.

Paddy Padmanathan, the president and chief executive officer of ACWA, said the project will significantly enhance the company's position as a rapidly expanding power developer in southern Africa, as the region is one of its target markets, and will help it diversify its fuel experience beyond oil, gas and solar.

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