Moatize Coal Mine

The Moatize coal mine located in the Tete Province of Mozambique is one of the world’s biggest coal mines by reserves.

Operated by Vale’s subsidiary Vale Mocambique, the open-pit coal mine has been producing since August 2011. It is Vale’s first greenfield project in Africa with the company granted the concession to build and operate the mine in 2006. Moatize is also the only coal mine currently being operated by the Brazilian miner.

Vale holds an 80.75% stake in the mine, while the remaining interests are held by Mitsui (14.25%) and Empresa Mocambicana de Exploracao Mineria (5%).

Vale signed a Heads of Agreement (HoA) to acquire Mitsui’s stakes in the Moatize mine, as well as the 50% equity stake in the associated Nacala Logistics Corridor (NLC) in January 2021.

Following the acquisition, Vale will search for a third party interested in the mine and the logistics assets, and exit the coal business as part of its commitment to become carbon-neutral by 2050.

Coal reserves at Moatize

The Moatize coal mine was estimated to hold 913.8 million tonnes (Mt) of proven and probable coal reserves as of December 2019, while the total marketable coal reserves were estimated to be approximately 364.9Mt.

Coal production

The Moatize mine’s total coal production decreased to 5.87Mt (3.09Mt of metallurgical coal and 2.78Mt of thermal coal) in 2020, due to the impacts of the Covid-19 pandemic.

The mine produced 4.03Mt of metallurgical coal and 4.73Mt of thermal coal in 2019, compared to 6.1Mt of metallurgical coal and 5.4Mt of thermal coal in 2018.

Moatize coal mine operational improvement

Vale has been implementing a new mining plan and a new operational strategy for the coal processing plants to ramp-up the Moatize mine’s output to 15 million tonnes per annum (Mtpa) in 2021 and 18Mtpa in 2022.

The new mining plan incorporates the prioritisation of ore bodies of better quality and better stripping ratio in order to yield a better product mix with significant cost reduction.

The two coal handling and processing plants (CHPPs) for the mine are also being revitalised as part of the operational improvement strategy.

The Nacala Logistics Corridor (NLC)

The Nacala Logistics Corridor (NLC) is a refurbished 912km rail line for transporting coal from mines in western Mozambique to the Port of Nacala in eastern Mozambique via Malawi.

The corridor runs from Moatize, Mozambique, and Chipata, Zambia, and passes through Lilongwe in Malawi to the Nacala-a-Velha maritime terminal on the Indian Ocean. It comprises 684km of the renewed rail line and 228km of the new line.

The railway in Malawi is operated by Central East African Railways (CEAR) which is controlled by Vale and Mitsui, while the Mozambican greenfield railway and the Nacala coal port are operated by Vale’s subsidiary Corredor Logıstico Integrado de Nacala (CLN).

The NLC transported a daily average of 23.9 thousand tonnes of coal, 1.4 thousand tonnes of other cargo, as well as carried 859 thousand passengers with 101 locomotives and 2,677 wagons in 2019.

Vale transferred a 50% stake in Nacala Logistic Corridor, as well as 15% participation interest in the Moatize coal mine to Mitsui for approximately £555m ($690m) in March 2017.

The Port of Nacala located at the eastern end of the NLC is considered to be the deepest port in Southern Africa. The port infrastructure extends over approximately 600ha at the bay of Nacala, in the Nacala-a-Velha district, Mozambique.

CLN’s concession agreements to operate the Nacala Port as well as the Mozambican greenfield railway extends until 2043.

Contractors involved

Kentz Corporation (now a part of SNC-Lavalin) was engaged in the construction of the CHPPs for the Moatize coal mine.