Mozambique Mining: Besides heavy rains, Vale Moatize coal mine sets new record for a 1Q

Besides unusual heavy rains during the first quarter, Vale biggest coal operation, Moatize, in the Tete province, has set a new production record for a first quarter. Although output was down compared to the last quarter of last year, according to the company´s 1Q15 Production Report.

That new record was 1.154- million tons, composed of 727 000 t of metallurgical or coking coal and 427 000 t of thermal coal. Compared with 1Q2014, metallurgical coal output in 1Q2015 was 22.2% higher, while thermal coal production was up 3.2%. However, during 4Q2014, Moatize’s metallurgical coal output was 987 000 t, while that of thermal coal had been 446 000 t. Thus, compared with 4Q2014, 1Q2015 production of metallurgical coal was down 26.3%, while output of thermal coal fell by 4.3%.

“The [total Moatize] output was 279 000  t lower than in 4Q[20]14, due to the abnormal rainy season and the lower physical availability of plant and equipment,” observed Vale in its production report. Abnormal rains have not been the only constraint on Moatize. “The ramp-up of the first phase of the Moatize coal project is currently restricted by the logistics infrastructure – railway and port – which does not allow for total utilisation of the mine’s nominal capacity of 11 Mtpy (million tons per year),” pointed out the report. “Gradually, the . . . logistics bottleneck will be eliminated as we complete and ramp up the Nacala logistics corridor.”

Currently, Vale has to rely on the Sena railway from Tete to the port city of Beira to transport Moatize’s coal to the coast for export. However, the capacity of this line is insufficient to carry all the coal that could be mined at Moatize if that operation functioned at or near full capacity. Instead, Vale has been developing an alternative – the Nacala Corridor. This comprises a 912 km railway from Tete, through Malawi, to the Mozambican port of Nacala, where a coal export terminal is being established. Some of this line is new construction but most of it already exists and is being significantly upgraded. It will have a nominal annual capacity of 18-million tons. In addition, the Nacala port is also being upgraded with a new coal terminal to handle the coal from Moatize.

“Some brownfield sections in the [Nacala] railway, which were already upgraded, were washed away by the abnormal rainfalls that reached the region,” stated Vale. “These sections were fully recovered and the railway tests, which were delayed, are now performing according to our plans.

The greenfield sections of the Nacala Corridor achieved 99%, while the Nacala Port reached 97% physical progress.” The Vale group’s total coal production came to 1.695-million tons during 1Q2015, the Carborough Downs operation, in Australia, contributing the extra 541 000 t over and above Moatize’s production.

On the other hand, its production was up 636.4%, compared with 1Q2014. Vale’s other two Australian coal operations, Integra and Isaac Plains, were placed on care and maintenance during 2Q2014 and 3Q2014 respectively, although production from their openpits continued until coal production ceased in 3Q2014 and 4Q2014 respectively. Vale’s only other active African operation is the Lubambe copper mine, in Zambia.

A joint venture between Vale and South Africa’s African Rainbow Minerals holds 80% of the mine, with the other 20% belonging to the State-owned Zambia Consolidated Copper Mines Investment Holdings. “Lubambe,” reported Vale, “is ramping up and delivering 6 400 t of copper in concentrates on a 100% basis (attributable production of 2 600 t). Lubambe has a nominal capacity of 45 000 t per year.”