Japanese general trading company Mitsui & Co, part of the Mitsui group, has stated that it plans to close its deal with Brazilian mining and logistics group Vale to acquire stakes in the latter’s Mozambique operations by March next year. In December 2014, Mitsui & Co agreed to buy 15% of Vale Mozambique, the Vale subsidiary that owns and operates the Moatize coal mine in the African country’s inland Tete province, and 50% of Vale’s share in the Nacala logistics corridor, which encompasses a 912 km-long railway running from Moatize through Malawi to the Mozambique port of Nacala and a coal export terminal in Nacala.
.(Mitsui & Co already holds 15% of Valepar, the holding company that controls the Vale group.) These two parallel deals are worth $763-million. “We are working on a finance deal with Vale and we expect to close the deal soon,” said Mitsui & Co president and CEO Tatsuo Yasunaga at a recent analysts meeting.
Moatize produces predominantly metallurgical, or coking, coal, and thus is not affected by Yasunaga’s announcement that the company will cut its involvement in thermal coal mining. “Considering the result of the global climate summit, we basically plan to reduce thermal coal assets,” he said. “The company’s share of global thermal coal production, through its shareholdings in various companies and mines, came to 13.5-million tons in the financial year ending March 31. “This should fall to nine-million tons over the next three years. “We will consider reducing thermal coal output or selling stakes in thermal coal mines,” he explained. Investment in coking coal projects and assets would continue. Mitsui & Co is also interested in Mozambique gas, specifically an offshore liquified natural gas (LNG) project.
.He reported that negotiations with the country’s government on the project were at an advanced stage but that the final investment decision would not be taken before March next year. He did expect that there would be “an advancement” in the decision-making process by then. He explained that, although oil prices remained low, construction and development costs had also fallen, meaning that the project was becoming competitive. (Mitsui & Co last financial year made its first annual loss since it was founded in 1947. It had to make what the Reuters news agency described as “massive writedowns” as a result of the drop in the prices of copper, iron-ore and oil. Yasunaga stated that the company would increase its disposal of assets, including some of its metal assets. He gave no further details.)
Source: mining weekly
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