Vale SA (NYSE:VALE): nailing Mozambique’s rail project

Posted by Lynn Eisler July 18, 2013 0 Comment 1250 views

Vale SA (NYSE:VALE), the Brazilian multinational, is all set to construct an expansive railway line in Mozambique, from Moatize and Nacala-a-Velha. A Vale group source said that this railway line is expected to be operational by 2014 September. VALE is the primary investor in this multi-million dollar 912-km long railway line that links the Tete province which is a mining region, to Nampula Province’s Nacal port via Malawi. A Vale company source stated that the contracts for all the construction material that will be required for the project have been signed. Route clearance operations are in progress. Leveling work has begun in some areas and machinery has also been mobilized.

Railway for all

This massive railway line will run through Malawi that that is situated in the neighborhood. This is the area where the 136-km railroad construction between Nyaka and the western border is almost complete. The earth moving work that is currently in progress at Malawi will finish by the end of 2013 and placement of the rails will commence in January. The source said that this will enable the trials to start in 2014 September.

All the mining companies that operate in the province of Tete will be given access to the railway line. Once it has been completed, the line will have the capacity to transport 11M tons of coal on an annual basis by 2015 end. This will be extended to 13m tons /year and by 2017 will touch 18M tons.

Adding transportation capacity

The construction of this line had been decided as the Sena railway that links Moatize to the Beira port in the Sofala province does not have the capacity to meet demand from the mining companies. Despite all the modernization work that has been planned, it will not be able to transport over 12M tons of coal annually by 2014. Vale SA (NYSE:VALE) is also involved in the Nacala modernization work and it is building a coal terminal there.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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