Brazil’s Vale group has completed the process of renegotiating the deal reached in 2014 with Japan’s Mitsui & Co group for the sale of a percentage in coal-related interests in Mozambique, reports the Brazilian newspaper Valor Económico.
Mitsui & Co, a shareholder of the Vale group, should pay less than the originally agreed amount, which sources indicate may be reduced by 30 percent, the respective article states.
In 2014 Mitsui & Co agreed to pay USD763 million for stakes in Vale’s projects in Mozambique: 15 percent in the Moatize coal mine and 50 percent in the logistics corridor comprising the railway line from Moatize in Tete province via Malawi to the terminus in Nacala and that city’s port.
Vale CEO Murilo Ferreira recently said that the agreement with Mitsui should be concluded by this September.
He highlighted that the process was “in a very advanced stage” with only Malawi government approval still required, “something that is in the final negotiation phase” following last month’s approval by the Mozambican government.
The Brazilian newspaper reported that negotiations still also under way with the banks financing the operation, specifically the Japanese Bank for International Cooperation (JBIC), the International Finance Corporation of the World Bank group and the African Development Bank.
Coal mining at Moatize in Tete province has accounted for losses of $500 million per year for Vale, down to $112 million in the first quarter and $100 million in the second quarter of 2016.
Impairments assumed by the group for Mozambique – $2.4 billion – were the second highest included in the accounts, and the larger ones – $3.46 billion – were for a nickel mining project in Canada. MDT/Macauhub
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