Vale agrees on new terms to sell some of Mozambique coal assets to Mitsui
Brazilian mining firm Vale has agreed on new terms for a deal to sell some of its Mozambique coal assets to Japan's Mitsui & Co.
Under the new terms, Mitsui will contribute up to $450m for a 15% stake in the Moatize coal mine.
Vale owns 95% equity stake in the mine.
The new deal will include the payment to be made by Mitsui which amounts to $255m for the mine.
Mitsui said that the payment will be subject to fulfilment of certain conditions which include the performance of the mine. It could result in an additional payment of about $195m.
Mitsui, along with Vale also plans to raise finances up to $2.7bn, through financial institutions overseas and Japanese banks.
Vale CEO Murilo Ferreira said: "This is a very important project not only for Vale, but for Brazil and Japan, countries that are represented in Mozambique at this time, when the coal is recovering its significant power in terms of price."
According to Vale, the figures related to the valuation of the Moatize project go with the assumption that the mine will pay logistics service tariffs to NLC to economically support the repayment of the $2.7bn project finance package that both the companies seek.
Mitsui says that the agreement reflects the commitment of the two companies to add to the development of Mozambique and neighbouring African countries.
The present transaction will reinforce the strategic alliance by establishing supply structure that can cater to the needs of the growing demand for minerals including coal and iron ore.
The Moatize mine, located in Tete state, is expected to have an annual capacity of about 22 million tons.
Image: Vale agrees to new terms to sell its stake in Moatize project in Mozambique. Photo: Courtesy of Vale.