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Vale Moçambique, a subsidiary of Brazilian group Vale, posted a loss of US$44 million in the first quarter, the recently arrived director Pedro Gutemberg, who replaced Ricardo Saad, said in Maputo.
Gutemberg noted that the loss was due to high operating costs in the coal sector in Mozambique and a sharp drop in international coal prices.
Two years ago coal prices were around US$250 per ton on the international market, but that figure has since fallen to around US$100, Gutemberg said.
The director of Vale Moçambique said, for example, that the competitiveness of the Mozambican coal industry is very low compared to Australia, which accounts for around 60 percent of world coal production. Vale also operates in the Australian coal sector.
Gutemburg noted that it was essential to ensure maximum efficiency along the entire coal production value chain in Mozambique, and added that if this is not possible, “results will remain negative and we will have difficulty attracting new investments.”
The new director of Vale Moçambique said that the company had drawn up a diagnostic report on the global coal market and that this would be the starting point for discussion with all sides and that objective answers to what he said was a “systemic problem” would only come later.
Gutemberg noted that in some countries “whenever we see that a product is facing a serious problem, it is the government itself that takes the initiative to lower tax on a temporary basis.”