Talk:Moatize mine

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2016 developments



Ncondezi Power

Earnings call

International Conference Call Vale 3rd Quarter 2010 Earnings Release October 28, 2010

Mr. Eduardo Bartolomeo: Good morning to all. Besides investing a large amount in 2010 in logistics, around US$ 2.6 billion, I think we achieved three remarkable achievements this year. First of all is we obtained the concession of Ferrosur in Argentina; they will support the fertilizer business and the maritime terminal; Simandou we are in good terms in agreement with the Government of Liberia. It is going very well and most important in our case for coal the concession that we bought from SDCN (we mean by that the Nacala corridor that will support the improvement of production in coal for Moatize and also the copper belt in Zambia because SDCN has also operations in Malawi.

Vale to invest US$ 24 billion in 2011 October 28, 2010 Media Release Moatize (US$ 422 million),

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the consensus of scientific research is that the dependence of economic activity on carbon-based fuels and their emission of greenhouse gases create risks of substantial future changes in climate, along with harm to economic activity. Efforts to mitigate problems are hampered by the fact that the benefits of carbon-based energy use are immediate and concentrated, while social costs tend to be delayed and dispersed. At the same time, they require international cooperation which is a difficult task given that the benefits of mitigation policies tend to be country-specific, with divergent valuations among different countries. Vale has been using technology to develop initiatives designed to reconcile short term and long term interests and private and social returns. At the same time, as a global company we are able to implement actions to promote sustainability in several countries, helping to minimize the implications of divergent valuations of the net benefits arising from these initiatives. Our investments in corporate social responsibility (CSR) are dedicated to protect the environment and to create opportunities to free communities from poverty, leading to economic and social mobility.

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Coal – gaining scale Vale continues to foster growth opportunities in order to become a large global player in the coal business. We have the potential to multiply our current production capacity to reach 42 Mtpy by 2015. The increase is underpinned by the ramp up of current operations and the development of Moatize, and Moatize II, in Mozambique, and advanced exploration projects in the Bowen Basin, in the state of Queensland, Australia. After the installation of a longwall and the expansion of the CHPP (coal handling preparation plant), Carborough Downs, an underground mine in Australia, is ramping up to reach its nominal capacity of 4.8 Mtpy in 2011. El Hatillo, in Colombia, is also ramping up to reach its nominal capacity of 4.5 Mtpy in 2012. The Moatize project, in Mozambique, will be delivered in mid-2011. It involves an investment of US$ 1.658 billion, of which US$ 422 million is budgeted to be spent in 2011. Nominal capacity reaches 11 Mtpy of coal, of which 8.5 Mtpy of metallurgical coal – hard coking coal – and 2.5 Mtpy of thermal coal. In this first phase, the production of coal will be transported by the Linha do Sena railway to the Beira port, which is receiving additional investments in one of its piers. In 2011, we will start the development of the second phase of Moatize (Moatize II). The project comprises the opening of a new pit, the construction of a new CHPP and the expansion of the stockpile area, plus the entire associated infrastructure. Moatize II has US$ 161 million budgeted for 2011. Moatize II will add 11 Mtpy to total capacity and its start-up is expected for the second semester of 2013. The project is still subject to approval by the Board of Directors. In order to enable the necessary logistics infrastructure for transporting the output coming from the expansion of the Moatize coal project, Vale has acquired control of the Sociedade de Desenvolvimento do Corredor do Norte SA (SDCN). SDCN controls and is responsible for the concession of the port of Nacala, the concession of an 872 km railroad in Mozambique, which connects Entrelagos in the Niassa province to the port of Nacala and also controls a railway system in Malawi, which currently comprises 797 km of railway connecting the country, north-south and east-west. These rail systems will provide the additional logistics corridor to transport the coal produced. In 2011, we will start investing in the Nacala Corridor project to create a world-class logistics infrastructure to support our operations in Moatize. This project comprises the building of 200 km of railroad connecting Moatize mine to our railway concession in Malawi, investments in the rehabilitation of 685 km of the existing SDCN railroads in Malawi and Mozambique and building a 21 km rail branch line connecting the existing railroad to the new coal terminal in Nacala that will be built. The start-up is expected for 2014 and the project is still subject to Board approval. It involves investments of US$ 298 million budgeted for 2011. We continue to advance the development of the Australian projects. Ellensfield is a coal project comprised of a high-productivity underground longwall mine accessed via drift, surface infrastructure, and an access road to transport the coal to the Carborough Downs wash plant. With nominal capacity of 4.5 Mtpy, the coal recovery is estimated to be 52% of hard coking coal and 48% of thermal coal. Capex budgeted for 2011 is US$ 47 million. Start-up is expected for the first half of 2015. The project is subject to approval by the Board of Directors. 9/21/2010 Vale structures logistics to support its operations in Africa

Vale informs it exercised an option to purchase a 51% stake in Sociedade de Desenvolvimento do Corredor do Norte SA (SDCN), owned by the Mozambican company Insitec SGPS SA (Insitec). This acquisition will enable the necessary logistics infrastructure for transporting the output coming from the second phase of Moatize coal project (Moatize II) development.

Moatize is a coal deposit with proven and probable reserves of 1.087 billion metric tons of coal and the project includes an open pit mine operation. Moatize I has a nominal production capacity estimated at 11 million metric tons of coal, 80% metallurgical coal and 20% thermal coal, with start up expected for the first half of 2011.

In the first stage of development is being built a CHPP (coal handling preparation plant) with annual capacity of 26 million metric tons. In this first phase, the production of coal will be transported by the Linha do Sena railway to the Beira port.

SDCN controls, with 51% participation, the Corredor de Desenvolvimento do Norte (CDN) and the Central East African Railways (CEAR). The CDN is responsible for the concession of an 872 km railroad in Mozambique, which connects Entrelagos in the Niassa province to the port of Nacala in the Nampula province, northern Mozambique, and of the port of Nacala. CEAR holds the concession of the railway system in Malawi, which currently comprises 797 km of railway connecting the country, north-south and east-west. CDN and CEAR rail systems are connected near the mineral region of Moatize, in the province of Tete, Mozambique, providing an additional logistics corridor for the coal to be produced in the region.

While that makes it feasible to expand the capacity of Moatize, the logistics infrastructure constitutes an excellent alternative for transporting to the east coast of Africa the production from the copper belt of Zambia, where we are starting to develop Konkola North, from our Evate phosphate rock project in Mozambique, and other cargo from Zambia-Malawi-Mozambique.

With the goal to create a world-class infrastructure of logistics to support our operations in Central and Eastern Africa, we will invest in the capacity expansion of the Nacala logistics corridor, through the construction of railway links needed to ensure the production of Moatize and a new deep water maritime terminal in Nacala.

This transaction is an integrated part of Vale's strategy to build efficient logistics infrastructure to support the growth of its activities with high potential for value creation. In this context, as recently disclosed, we obtained the concession for a Ferrosur railway stretch in Argentina very important for the success of the Rio Colorado potash project, and entered into contracts with the government of Liberia for the construction of an integrated railway-port system for transporting the production of iron ore from Simandou, in Guinea. 3/27/2009 Vale breaks ground on the Moatize coal project

Vale holds today the cornerstone laying ceremony of the Moatize Coal project in the province of Tete. The mine will have a nominal production capacity of 11 million tons per year of coal products (metallurgical and thermal). The start of production is expected for December 2010.

Present in Mozambique since November 2004, Vale holds a concession to explore one of the biggest coal reserves in the world located in Moatize, in the Tete province, in the northwest region of the country. The project is Vale's biggest investment in the coal business. Moatize's production will be transported by railway with approximately 600 km, called the Sena Line, up to a new coal terminal to be built by a Porto da Beira [Beira Port] concessionaire in the Sofala province. The coal will be exported to markets in Brazil, Asia, Middle East and Europe, traditional consumers of such resource.

Moatize project's total investment is estimated at over US$ 1.3 billion and is expected to boost the Mozambican economy, generating jobs and income. More than 2,000 people are already working in the project and its implementation, among them 90% are from Mozambique. The number of workers at the highest point of implementation works will exceed 3,000, most of them from Mozambique. A workforce of 1,500 direct employees is forecasted for the operation phase.

In addition to its job generation commitment, Vale seeks to encourage and develop suppliers of products and services in the regions where it operates. Therefore, the company is already carrying out a survey on small and medium-sized companies in Tete and the Moatize region in order to identify and qualify potential suppliers. Vale's aim is to qualify local suppliers for the project's implementation and operation phases by creating sustainable business and jobs opportunities in the region.

Since the start of the feasibility study until now, Vale has invested about US$ 7 million in social projects in health, agriculture, infrastructure and education. Some projects included the construction and rehabilitation of units in the Tete Provincial Hospital and the Moatize Health Center, the renovation of the Moatize Geology and Mines Intermediate Institute (and internship at Vale for IMGM students), projects to develop local agriculture, etc.

Vale's mission is to transform mineral resources into prosperity and sustainable development. Therefore, it is engaged in leveraging the development of the communities in its growth path. In this respect, synergies have been created with the Mozambican government and the civil society in order to fill the main gaps in health, education, culture and leisure, in addition to activities associated with job and income generation.

In respect to the operational phase, the main purpose of the social programs and projects is to ensure the social and economic sustainability of the 1,100 families to be resettled due to the implementation of the Moatize Coal Project, and of the neighboring communities. An intense study and research program was developed always in partnership with government, communities and specialized companies representatives.

Moatize in the global market

Present in more than 30 countries, Vale has researched and developed several opportunities to become a major global company in the coal segment. Moatize fits perfectly in the company's strategy, together with other Vale assets in coal operations in Australia and in two partnerships in China. Moreover, Mozambique has a huge growth potential thanks to its mineral reserves, energy and water potential.

6/28/2007 Vale signs a mining contract for Moatize Companhia Vale do Rio Doce (Vale) announces that the government of Mozambique has approved a mining contract for the exploitation of the Moatize coal project, located in the northwestern province of Tete.

This event follows an earlier approval of the project development plan by the Mozambican authorities in early June. The contract, lasting 25 years, can be extended for additional periods of time, and establishes the tax, international trade and foreign exchange regimes that will rule the Vale's investment in Moatize.

The process to build the mine begun in November 2004 and the last steps to be taken are receiving the mining concession and concluding negotiations with local railroad and port operators for the logistics contract.

The project involves the exploitation of an open pit mine for 35 years, with an estimated average annual production of 11 million metric tons (Mt) of coal products - 8.5 Mt of metallurgical coal and 2.5 Mt of thermal coal.

Roger Agnelli, Chief Executive Officer of Vale, commented, "This is an important step in our strategy for the coal business. We still need to reach an agreement, which is in the final stage of discussion, involving competitive costs for the logistics of the project." Roger added, "I would like to highlight the support and partnership developed with the government of Mozambique, which were critical for the smooth evolution of this process. I am very happy with it."