Brazil’s Vale SA will place its Mozambican coal operations on maintenance for three months, which accounts for about one-third of the southeast African country’s export earnings.
Mozambique exported $1.7 billion worth of the fuel used in power stations and steel plants last year, with Vale operations in the center of the country accounting for almost all of that, according to Bloomberg.
The company completed a review of its Mozambican coal mines and decided to shift the focus to producing more metallurgical coal and less of the lower-value product that power stations burn. Under the new plan, the assets will produce at a rate of 15 million tons per year by the end of 2020, up from less than 12 million tons last year, but short of Vale’s target to export 22 million tons from the mines in central Mozambique.
This quarter, Vale will write down the assets by $1.6 billion, it said.