Brazil company, Vale, says it awaits the approval of the Malawi Government before concluding the sale of shares in its Mozambican operations to the Japanese company Mitsui.
Vale Chief Executive Officer, Murilo Ferreira, is quoted by Brazilian newspaper, Valor Economico as saying that the agreement is “in a very advanced stage”, and is awaiting approval from the Government of Malawi.
Mitsui agreed, in 2014, to pay $763 million for a 15 percent stake in Vale’s open cast coal mine at Moatize and a 35 per cent stake in the new mineral port at Nacala-a-Velha, on the northern coast, and the Nacala- Moatize railway.
However, the deal only received final approval from the Mozambican Government at the beginning of June this year.
Ferreira said Malawi Government’s approval is necessary because the railway line, which runs from the mine in Moatize in the western province of Tete to the port at Nacala-a- Velha, crosses through Malawi.
The deal, according to Ferreira, is expected to be concluded by September.
Transport Minister, Malisen Ndau, could not be reached for comment yesterday.
Vale has had some success in reducing costs in its Mozambique operation. However, the production cost of its coal (at the port) is still $103 per tonne which is well above the international price for coal.
In its report on the second quarter of 2016, Vale stated that the FOB price of the benchmark Australian high-grade coking coal was just US$84 per tonne during the quarter.