The diversified Rio de Janeiro-based Vale, a leading producer of iron ore, has cut 2014 spending plans a third consecutive year. Vale officials hope coal joint ventures, along with the sale of an interest in its Mozambican rail link and fertilizer assets, can enhance funding while cutting capital commitments, said company representatives.
Analysts have noted that since Mozambique’s Moatize project is Vale’s biggest coal asset — and one of the world’s largest metallurgical coal mines — its sale could equal $1 billion.
Apart from Moatize, Vale also owns coal mines in Australia, including a majority interest in the underground Carborough Downs mine, along with a 50% stake in Isaac Plains — in a joint venture with Japan’s Sumitomo Corp. — and 61% in the Integra mine in Hunter Valley, New South Wales. Vale also owns undeveloped projects, including Queensland’s Belvedere project. Last year, Vale produced more than 5 million tons of metallurgical coal and nearly 2 million tons of thermal coal. Separately, Vale seeks to sell a minority stake in a group expanding rail and port corridor infrastructure from Moatize to Nacala port in Mozambique.