Konkola north..Brazil's Vale widens and deepens investments

[Clint]

Brazil's Vale widens and deepens investments in Africa

By: Keith Campbell
23rd October 2009


JOHANNESBURG (miningweekly.com) - Major Brazilian mining group Vale is to invest $595-million in its Moatize coal project in Mozambique next year. The company is already studying the feasibility of a second phase at Moatize, designated Moatize II.

Subject to the approval of its board, Vale will also invest $50-million in the Konkola North copper project in Zambia, which is scheduled to be started next year. Konkola North is part of Vale’s 50:50 joint venture with South Africa’s African Rainbow Minerals.

Moatize lies in Mozambique’s Tete province and will involve a total investment of $1,32-billion. Start-up is forecast for the first half of 2011, and this first phase of the mine will have a nominal production capacity of 11-million tons per annum (Mtpa) of coal, divided into 8,5 Mtpa of hard coking coal and 2,5 Mtpa of thermal coal.

At Moatize, Vale is building one of the biggest coal handling preparation plants in the world on a mine site. This will have a capacity of 26 Mtpa of coal, and thus be able to handle the output of Moatize II as well.

The coal produced by Moatize will be carried for 600 km by the Sena-Beira railway to a new coal export terminal to be built by a Mozambican State-owned concessionary at Beira, in the province of Sofala. However, this railway will not be able to handle the output of Moatize II as well, so this expansion project is dependent on an alternative transport solution. Vale is examining the building of a new railway, which would be some 200 km long, from Moatize to Nacala, and the construction of a new export terminal at Nacala. (In Brazil, Vale operates both railways and ports).

Konkola North is believed to be the second largest resource on the Zambian Copperbelt, and will be developed as an openpit mine with a nominal production capacity of 44 000 t/y of copper in concentrates. Start-up is expected in 2013 and Vale’s total investment in the project will be $145-million, making Konkola North a $290-million project.

In all, worldwide Vale will invest $12,9-billion next year, which represents a 29,3% increase in capital expenditure over the $10-billion invested in the 12 months ending June 30, 2009.
Of this figure, $8,165-billion will be invested in Brazil, $1,153-billion in Canada, and the rest allocated to Argentina, Australia, Chile, China, Indonesia, Malaysia, Mozambique, Oman, Peru and Zambia. The group will invest $829-million in environmental protection and conservation and $170-million in social projects.

Organic growth remains Vale’s priority, with 76,6% of next year’s budget assigned to fund greenfield and brownfield projects and research and development – an increase over the 71,1% that was the average for the past five years.

http://www.miningweekly.com/article/bra ... 2009-10-23