Construction Under Way on Mozambique's $1.5 Billion Coal Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--A consortium led by Brazilian miner Vale (NYSE: RIO) (Rio de Janeiro) is starting site preparation works at its Moatize coal project, located in the Tete district of the Moatize province in Mozambique. The project entails the development of a mine and a preparation plant with a nominal production capacity of 11 million tons per year. Of this, 8.5 million tons per year will be metallurgical coal for export, mostly for use in the steel industry, while the remaining 2.5 million tons per year will be thermal coal used to fuel a 2,000-megawatt thermal power station in the country. The project also includes a 900-kilometer railway linked to a deepwater port in Beira. For details, see related November 26, 2007, article - Brazilian Mining Firm Plans $1.5 Billion Investment in Mozambique. Moatize's planned investment is about $1.5 billion, and expenses are budgeted at about $100 million for 2008. Production is expected by early 2010.

Construtora Norberto Odebrecht S.A. (Rio de Janeiro, Brazil) is in charge of the entire project infrastructure construction, which comprises roads, civil engineering and execution of a mineral coal treatment plant. Australian company Sedgman Limited (Milton) is in charge of the detailed engineering services for the plant, which, according to the company, is one of the largest single-building, four-module coal preparation plants in the world. Another Australian company, Snowden (West Perth), is providing detailed engineering services for the mine.

The Moatize mine is believed to hold about 2.4 million tons of coal reserves, making it one of the largest untapped deposits in the southern hemisphere. The consortium formed by Vale, which holds a 95% interest in the project, and American Metals and Coal International (Greenwich, United States), holding the remaining 5% interest, won the rights to rehabilitate the mine through a government tender in 2004. Moatize is the latest in a host of mega-projects designed to diversify Mozambique's fast-growing economy, which is heavily reliant on agriculture and tourism

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