Brazilian Mining Firm Plans $1.5 Billion Investment in Mozambique

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Researched by Industrial Info Resources (Sugar Land, Texas)--Lurking in the shadows of South Africa is Mozambique on Africa's southeast coast, with South Africa and Swaziland to its south. Mozambique produces gold, gemstones, salt, bauxite and has deposits of coal, iron ore, tantalum and titanium. Mozambique's Metals & Minerals industry is experiencing a new wave of development since the days of the Maputo Iron & Steel development, Mozal Aluminum Smelter and the Maputo corridor development of the early 2000s.

This new wave began last April. Kenmare Resources started mining and concentration at the $400 million Mona titanium/zircon mine. The company continues with other projects in Mozambique.

The world's largest iron ore miner Companhia Vale do Rio Doce (CVRD) (Rio de Janeiro, Brazil) plans to invest more than $1.5 billion. CVRD's Moatize coal project has the backing of the Mozambican government. CVRD has completed a feasibility study on the project and has guaranteed that the training of technical staff, mobilization of equipment and the construction of infrastructure will begin in 36 months. When production starts in 2010, Moatize will be the biggest coal mine in the southern hemisphere with annual production capacity of 14 million tons a year and an expected mine life of 70 years.

Some of the coal would be used to fuel a planned 1,500-megawatt mine mouth power plant, and the rest would be exported. Foreseeing the need for reliable infrastructure, the Mozambique Ports and Railways is rebuilding the railroad between Moatize and the Ocean Port of Beira. The development of the Moatize project has precipitated the $180 million expansion of the Beira Port. The expansion activities at the Beira Port involve the addition of a dedicated Coal terminal. The Beira port is operated by Cornelder de Mozambique Sarl (Beira, Mozambique), which expects to select an engineering, procurement and construction contractor by the first quarter of 2008.

Although BHP Billiton (London) is yet to commit to a time line for the development of the Corridors Sands Project (acquired from Western Mining Corporation of Australia), it plans to move the project into feasibility by 2008. BHP Billiton goal is to curb cost by developing the corridor sand project in phases, and to build a smelter alongside its Mozal aluminum operations. The Corridor Sands project contains more than 100 million tons of ilmenite.

As long as Africa remains one of the last open frontiers for global mining companies and companies engage in strategic movements into Africa to secure access to natural resources, Mozambique's Metals & Minerals sector will grow with it.

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