Vale and Nation Agree on New Railway

19 April 2011

Maputo — The Malawian government and the Brazilian mining company Vale on Monday signed a memorandum of understanding in the Malawian capital, Lilongwe, on the construction of a new railway across southern Malawi.

The agreement was witnessed by Mozambican Transport Minister Paulo Zucula.

The purpose of the new line will be to take coal mined by Vale at its concession in Moatize, in the western province of Tete, to the northern Mozambican port of Nacala, and the shortest way of reaching Nacala is through Malawi.

The new railway is thought necessary because the existing Sena line, from Moatize to the central port of Beira, will be unable to handle the vast amount of coal exports planned by Vale and the other mining companies exploiting the Moatize coal basin.

According to a report on Radio Mozambique, the new railway will cost about two billion US dollars.

Galib Chaim, the managing director of Vale-Mozambique, said that the memorandum of understanding with Malawi is just the starting point for the actions that will be needed to build the line.

The total distance from Moatize to Nacala is about 900 kilometres. Not all the line will be entirely new, since after passing through Malawi it will join the existing northern railway to Nacala. For mineral exports Nacala has the great advantage that it is a natural deep water port which, unlike Beira or Maputo, does not need any dredging. Ships of any size can dock at Nacala.

Vale intends to start its coal exports from Moatize in the second half of this year, using the Sena line, and the new coal terminal now under construction in Beira.

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