Vale Invests In Mozambique Railway Line

Mozambique railway

VENTURES AFRICA – Brazilian multinational Vale is to construct a huge railway line between Moatize and Nacala-a-Velha in Mozambique that could become functional by September 2014, a source from the Vale group said in the Mozambican press.

The Brazilian group is the main investor in the multi-million dollar 912 km long rail-line linking the mining region of the Southern African country’s Tete province to Nacala port in Nampula province, passing through Malawi.

The Vale source said that all construction material supply contracts for the project had been signed and that the route was now being cleared, with levelling work in some areas, and machinery mobilised. The railway line will pass through neighbouring Malawi, where the construction of 136 km of railroad between the western border and Nyaka is nearing completion.

Earth moving work in Malawi will be finished at the end of the year and the rails should start being placed in January, so that trials can be conducted in September 2014, the source said.

All mining companies operating in the Tete province will have access to the railway line. Upon completion, it will be able to transport 11 million tons of coal per year at the end of 2015, increasing to 13 million tons a year later and 18 million tons in 2017.

The line’s construction was decided because the Sena railway linking Moatize to the port of Beira in Sofala province cannot meet the demand from mining companies; even with planned modernisation work it will be unable to transport more than 12 million tons of coal per year in 2014.

Vale is also involved in work to modernise the port of Nacala, namely by building a coal terminal.

Huge gas discoveries have been made in Mozambique in the last few years and it has attracted investment culminating in the country having one of the highest growth rates on the continent this year. A report released this week by Thomson Reuters showed that Mozambique was the biggest beneficiary of mergers and acquisition deals on the African continent.