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Home / International Customs / Japan plans to invest $763m to build mine, infrastructure projects in Mozambique  
Japan plans to invest $763m to build mine, infrastructure projects in Mozambique  

Japan plans to invest $763m to build mine, infrastructure projects in Mozambique  

MOZAMBIQUE: Mitsui president and chief executive officer Masami Lijima said that he will take an active part in the promotion of infrastructural facilities in South Africa by investing its upfront payment amount for investment and loans will be $450 million for the mine and $313m for the infrastructure.

The firm has signed an agreement with Brazilian-based mining group Vale SA, part to take part in the Moatize coal mine project and the Nacala rail and port project which Vale has been operating and developing in Mozambique.

Mitsui will own a 15% equity interest in Vale’s wholly-owned investment subsidiary that holds a 95% equity interest in the Moatize project. Mitsui will also hold a 50% equity interest in Vale’s investment subsidiaries that have been promoting the Nacala project.

According to Mitsui, the Moatize mine is “one of the largest and cost-competitive operating coal mines in the world”. The firm said the mine has a “huge coal reserve amounting to 690m tonnes of metallurgical coal and thermal coal, and its coal seams are relatively near surface, which enables the large-scale open-cut operation”.

Vale began its production at the mine in August 2011 and now exports coal via the Sena railway from the Port of Beira, which is about 600 kilometres south of the mine. The annual production in 2013 was 3.8m tonnes, Mitsui said. “Vale has now been expanding the annual production capacity of the mine up to 22m tonnes, which is expected to be reached in 2016.”

Mitsui said plans for new infrastructure at Nacala have been drawn up to handle the mine expansion, which will produce more coal than the existing Sena rail and port capacity can manage. The new infrastructure will enable shipments from the Port of Nacala, which is 912 km east of the mine.

“Moatize is the first mine that Mitsui has participated in since 2004, and it is a durable and excellent resource asset that will provide the diversification of our supply sources and enhancement of our coal business revenue base,” Mitsui said. “Moatize-Nacala is an integrated project that covers the development of the transportation and port infrastructure, which is essential for the whole coal business operations, from mining development to the shipments of the coal.”

Mitsui said the Nacala project requires an upgrade of the 682 km existing rail line, which runs across Mozambique and Malawi, and the construction of a new 230 km rail line and coal terminal in the Port of Nacala, in addition to “development of general commodities terminals”. “By managing such infrastructure effectively, its railway transport annual capacity is planned to increase gradually up to 22 million tonnes, the port’s coal shipping capacity is designed to be 18 million tonnes annually and general commodities shipping capacity is expansible to four million tonnes annually,” Mitsui said.