Mozambique to Boost Growth with $1 Billion Rail Infrastructure Spend

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Project developers in the mining industries can take heart from plans announced in Mozambique to expand transportation infrastructure. The lack of rail routes to carry the output from the country's rich resource deposits has inhibited mining projects and exports.

Mozambique has globally important coal reserves, but mining companies such as Vale S.A. (NYSE:VALE) (Rio de Janeiro, Brazil) and Rio Tinto (NYSE: RIO) (London, England) currently face major difficulties transporting the coal. Currently, Vale is backing the construction of a rail line between Moatize in Tete province and the deepwater port of Nacala.

At the Fourth Annual Conference of the Port of Maputo, Sancho Quipico Junior, chief executive officer of Mozambican port and rail company Portos e Caminhos de Ferro de Mozambique (CFM), announced plans to invest more than $840 million by 2016 in the three rail lines in the southern part of the country, as well as the purchase of new locomotives.

Through 2021, CFM plans to invest about $1.3 billion, 72% of which will be used to purchase equipment, and the remainder for repairing and building infrastructure.

It was announced at the conference that the Port of Maputo was being used by Salgaocar Swaziland (Goa) to send iron ore to China. So far, the company has exported more than 1 million tons.

It was reported that 4,500 tons of iron ore arrive at the port every day, and the three Mozambican companies hired to unload product at the terminal are looking into increasing their logistical capacity, as Salgaocar Swaziland plans to increase the amount of ore it exports through Maputo by at least 50%. Over the next seven years, the Swazi company plans to mine about 20 million tons of iron ore, which will be exported through the Port of Maputo.

In February, a senior banker said that Mozambique's economy is expected to grow at a rate of 8.1% this year and 8% in 2015, but could grow even more if improvements were made to its rail network.

For related information, see April 14, 2014, article - Mozambique's Rail and Port Network Aims to unlock Coal Export Potential.

View Project Report - 300018432 300055821 300056133

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities