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Brazil's Companhia Vale do Rio Doce (CVRD) informs that it was declared the winner of an international bidding process to explore coal deposits in the Moatize region, north of Mozambique.
CVRD is associated in this project with American Metals and Coal International (AMCI), a North-American coal producer.
CVRD has 95% of the winning consortium, while AIMC owns the remaining 5%. The CVRD/AMCI consortium bid US$ 122.8 million for the concession.
Moatize is considered the largest unexplored coal province in the world. It is a world-class deposit estimated to have 2.4 billion tons, allowing the extraction of coking and thermal coal.
The Brazilian steel industry, especially the new capacity increase projects, is a natural market for absorbing the supply of coking coal, while there is excess demand for energy in Austral Africa, offering a good opportunity for thermal coal.
Mozambique is a fast-developing economy, with political stability and a modern mineral legislation.
It has recently received significant foreign direct investment flows in the metals and mining industry.
Mozambique has the financial support from multilateral credit institutions, such as the International Finance Corporation (IFC), a subsidiary of the World Bank, and from regional credit institutions, such as the Industrial Development Corporation (IDC), from South Africa.
BNDES, the Brazilian national development bank, has formally expressed its interest in supporting the Moatize project.
CVRD already concluded the project's pre-feasibility study. The feasibility study is scheduled to start in January 2005 and is estimated to take about twenty-four months to be concluded.
Total investment is estimated at US$ 1 billion and includes concession payment, mine development, construction of a maritime terminal for ship loading and social investments.
There is a railroad linking the Moatize region to ports in the coast of Mozambique, Nacala and Beira, which is operated, under government concession, by Indian companies.
The Moatize project represents a milestone in the CVRD initiative to enter the coal business. It is its first coal-mining project and, at the same time, increases its international operations.
In 2004, CVRD had already entered into two partnerships with Chinese companies — Yangkuang, Yongcheng and Baosteel — as a minority shareholder, for the development of coal-related business in China.
CVRD has large experience in the development and operation of large-scale mineral projects and in the handling of considerable volumes of bulk cargo through mine-railroad-port integrated systems.
It is also one of the main global suppliers of raw materials — iron ore, pellets, ferro-alloys — to the steel industry, and metallurgical coal will complement its portfolio.
Companhia Vale do Rio Doce
www.cvrd.com.br
PRNewswire
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