Page 7 - AsiaElec Week 05 2021
P. 7
AsiaElec COAL AsiaElec
Vale buys Mitsui’s Mozambique coal
interests for $2 ahead of divestment
MOZANBIQUE BRAZIL’S Vale is to buy Mitsui & Co.’s 15% stake to potential annual savings of approximately
in Mozambique’s Moatize coal mine and its 50% $25mn.
interest in the Nacala Logistics Corridor (NLC) Following the acquisition of Mitsui’s stakes,
for $1 each. Vale aims to begin the process of divesting its
The deal allows Mitsui to divest its interests in participation in the coal business.
Mozambique’s coal business, and also paves the It wants to maintain operations at the Moa-
way for Vale to consolidate its coal interests in the tize mine and the NLC and to find a buyer that is
country ahead of a sell-off. interested in those assets.
Vale said that the transaction was in line with Meanwhile, Vale said that it had been imple-
its focus on its core businesses and ESG agenda, menting two initiatives that are expected to pro-
which calls for it to become carbon neutral by duce sustainable results at the Moatize mine: a
2050 and reduce 33% of its scope 1 and 2 emis- new mining plan and a new operational strategy
sions by 2030. for the coal processing plants.
The two sides signed a heads of agreement The new mining plan prioritises ore bodies
(HoA) that establishes the main terms for the of better quality and has a better stripping ratio,
acquisition by Vale of Mitsui’s interests. Both which is anticipated to result in a better product
want the deal to be completed by the end of 2021. mix and cost reduction, as an outcome of invest-
Vale aims to consolidate NCL’s various sub- ments made in the last three years in an intense
sidiaries ahead of attempts to refinance the drilling campaign aimed at a better knowledge of
Nacala’s outstanding project finance liabilities of resources and reserves.
$2.5bn. The two processing plants will be revitalised
Consolidation of the project finance will in an attempt to raise production to 15mn tonnes
imply that approximately $30mn per year in per year in the second half of 2021 and 18mn tpy
operating expenses at the Moatize mine, associ- in 2022.
ated with the Nacala Corridor tariff and which Over the past 15 years Vale has worked in
currently have an impact on the coal busi- partnership with the Mozambique and Malawi
ness’ EBITDA, will be reclassified as financial governments to develop the Moatize mine and
expenses, debt amortisation, sustaining capital 912-km NLC. The deal is part of Vale’s plans
and others, with an equivalent increase in the to simplify its portfolio of assets and meet the
coal business’ EBITDA. requirements of the Paris Agreement. Vale
Future refinancing of the project finance aims to become a global leader in what it terms
and simplification of the structure will lead low-carbon mining.
Week 05 03•February•2021 www. NEWSBASE .com P7
