Mozambique Coal Mining: Vale Board agrees to new terms for sale of Moatize Mine and Nacala Logistics assets to Mitsui

Vale (NYSE:VALE) says it reached agreement on new terms with Mitsui (OTCPK:MITSY) for the sale of a stake in its Moatize coal mine and connected railway in Mozambique.C

Under the new terms, Mitsui will contribute up to $450M for 15% of Vale’s 95% stake in the mine – with $255M guaranteed while $195M depends on attaining unspecified goals related to the mine’s performance – and $348M for 50% of Vale’s 70% stake in assets related to the Nacala Corridor, a railway and port connected to the mine; in the original deal announced in December 2014, Mitsui had agreed to an upfront payment of $450M.

A source familiar with the matter said Vale Mozambique was valued at $ 1.7 billion.

The deal had not closed because of problems in securing long-term financing for the project, which is one of Africa’s biggest at $4.4B in estimated total costs; Vale already has poured ~$2B into it.