Brazilian mining firm Vale expects coking coal production from its Moatize mine in Mozambique to reach 7.2mn t in 2017, a 106pc increase on the year.
The company also expects to produce 4.5mn t of thermal coal compared with 2mn t in 2016, which would increase Moatize’s total output by 113pc on the year to 11.7mn t.
Vale plans to ramp up production at the mine to 16mn t in 2018, rising further to 20mn t by 2021.
The company expects overall shipments in 2017 to increase by 44pc on the year to 12.4mn t, of which 11.1mn t will have been shipped through the Nacala Logistics Corridor and 1.3mn t through the port of Beira.
The ramp-up in output has enabled Vale to reduce its production costs at Moatize, which this year are projected at $78/t, down from $109/t in 2016. It forecast costs to decline steadily over the next five years to $56/t in 2022.
The Moatize mine and railway project is backed by state-owned Japan Bank for International Co-operation (JBIC), which signed a $1.03bn loan agreement with Vale at the end of November. Japanese trading company Mitsui acquired a 15pc stake in Moatize in early 2017 and Japanese lenders are backing additional project finance loans.
This support is driven by the Japanese government’s commitment to securing additional supplies of high-quality coking coal for the country’s steel industry.
Source: ArgusPrevious Next