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Brazilian miner Vale’s upgrade of Mozambique’s Sena rail line, which transports coking coal from its Moatize project in Tete province to the port of Beira, has been delayed until the end of 2012.
Contractor delays to upgrade work that will increase the rail line’s capacity to 6.5 million tpy has seen the completion date for the project pushed back, the chairman of state-owned rail operator CFM, Rosario Mualeia, told delegates of the Coaltrans Mozambique conference in Maputo on Wednesday November 21.
“This process should have ended,” Mualeia said. “The contractor did not keep to schedule.”
Further upgrade work on the Sena rail line would see capacity increase to 20 million tpy by 2014, he added.
Vale started shipping coal from Moatize on the Sena rail line in September 2011 but slashed output expectations from Moatize in October due to transport issues.
Mualeia said that Vale’s logistical issues were due to derailments rather than a lack of capacity on the line.
Capacity on the Sena line will be shared by Rio Tinto and Vale, with 500,000 tonnes allocated to Jindal Steel.
The government will resolve any conflicts regarding capacity, Mualeia said.
CFM is Mozambique’s rail and ports operator. The group will put out a tender for a new rail and port project that will lay 525km of rail line from Tete to Macusa in the Zambezia province. The project is estimated to cost $2 billion, Mualeia said.
The various rail and port projects currently planned by Mozambique’s government and coal producers will take the country’s coal export capacity up to 120 million tonnes within five years, he added.
An independent operator will be set up to run the lines and a state regulator will manage rail access.
Infrastructure remains the biggest concern for producers looking to tap into Mozambique’s large reserves of hard coking coal. The remote location of the country’s coal fields and their limited rail and road access have severely limited the volume of coal that can reach the seaborne market.
Michelle Madsen mmadsen@steelfirst.com Twitter: @mmadsen_SF