Mozambique Mining: “No Capital Gains in Vale-Mitsui deal” – @Verdade reports

CLN coal trains on its way to Nacala-a-Velha Terminal

The Mitsui group, Japanese conglomerate, concluded last week the purchase of assets in Mozambique Vale, a Brazilian multinational, for 770 million US dollars. “In this operation, we were not cleared gains” explained the @Verdade the Mozambique Tax Authority (ATM). It is recalled that the private business that happened in the last two decades in the concessions the Port, the railway and the Nacala Development Corridor never generated significant taxes to the Mozambican state.

In a statement the Vale informs that it received on Monday (27) 733 million US dollars of Mitsui. The Japanese group is buying, for 255 million US dollars, 15% of the 95% stake of Vale in coal mine at Moatize, in Tete province, and the remaining 478 million dollars is to acquire 50% 70% stake in the Brazilian firm Nacala logistics corridor (NBL), the railway line used to transport coal to the coal mined in Nacala the old terminal, through Malawi.

“The remaining amount will be paid by Mitsui upon completion of the financial plan,” said the press release published on the website of the Brazilian company.

Vale will pay the state 1.2 million USD for the shares of most stamp duty mine

Following the deal between Mitsui and Vale @Verdade the ATM questioned whether it would have the tax base in terms of care of Surplus Value. “(…) In this operation, we were not cleared capital gains, because there was no sale of shares, but the issue of shares that were acquired at par value”, explained by e-mail the general coordinator for the taxation of mining and quarrying Aníbal Mbalango.

However, “due to lack of Capital Gains by the fact that the net realizable value (selling price) is equal to the purchase price, however, because the sold shares were the result of an issue, Vale company will pay the Mozambican state , the value of 227,000 US dollars and about 1 million US dollars for the acquisition of shares in the mine and the railroad, respectively, relating to stamp duty, the sealing of the contracts. ”

According to Mbalango, “the provision regarding contract sealing concerning the railroad has already been made, and required the payment of the value of a million dollars, and pending the payment of the 2nd installment, which is still within legally stipulated. ”

“It should also be noted that this operation started in 2015 and the ATM has already informed the company of the amounts that the company must pay when you realize the transactions,” further added the general coordinator for the taxation of extractive industry.

Million was paid in business in Logistics Nacala Corridor but never generated Surplus Value

Since mid-2016 Vale held 90% of the CLN, when it acquired 20% who were detained by the Railways Iron Mozambique (CFM). By 106 million US dollars to Brazilian multinational bought not only this share to CFM but still 49% in the Northern Development Corridor (Railway) and another 49% in Central East African Railway (CEAR – which operates-of-ways Malawi iron).

This deal between CFM and Vale has not generated Surplus Value to the exchequer. At the time the company clarified that the @Verdade “The tax revenues from these transactions are taxable within the overall field of CFM, ie, tax revenues will be channeled to the State together with the remaining materials of the company.”

Photo Adérito Caldeira
Nacala Logistics Corridor coal train

By the way, 610 kilometers of this Logistic Nacala Corridor is part of the Northern Line, a concession awarded without tender in 2000 the Northern Development Corridor company, owned 49% by CFM and 51% by the Company for the Development of the Nacala Corridor (SDCN).


Over the 17 years of the existence of SDCN was input and shareholders outputs based on the purchase and sale of participation, businesses whose main terms and the names of the buyers were not disclosed and there is no record of having been paid any tax Surplus Value .

Among inputs and outputs SDCN shareholders, especially the sale of participation of two US companies Edlows Resources and Railroad Corporation to Celso Correia Insitec of in 2009 and the subsequent resale of the participation of Insitec the Brazilian multinational Vale.

Among the shareholders of the Company for the Nacala Corridor Development are members of the Mozambican political elite (especially Armando Emilio Guebuza, Alberto Chipande, Theodahad Mondim da Silva Hunguana, Mariano de Araújo Matsinhe) and senior staff of the CFM company should defend public interest (José Miguel Matabel, Rui Cirne Placido Carvalho Fonseca, Mualeia).


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