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Vale Mozambique Reports A $US105 Million Loss At The Close Of 2016

Vale Mozambique, a subsidiary of Brazilian mining multi-national Vale, reported an operating loss of $US105 million in the final quarter of 2016. While slightly down from losses recorded during the equivalent period in 2015 ($US508 million), the company continues to struggle to turn a profit on their investment in Mozambique’s Moatize coal fields.

According to Vale Mozambique’s 2016 Q4 report, the improvement in losses recorded are mainly due to austerity measures implemented at the company, which saw savings of $US344 million, as well as an increase in global coal prices in the last few months of 2016, which increased the company’s turnover by $US140 million.

According to Vale’s quarterly report, coal production at the Moatize coal fields has doubled in the past year. Coal exported along the Nacala corridor recorded revenues of $US110 million, while coal transported along the Sena line to the port of Beira posted a loss of $US215 million. Together, the Nacala and Sena lines carried 8.8 million tonnes in 2016, more than double the 41 million tonnes exported in 2015. A total of 8.7 metric tonnes was shipped from ports during the 2016 financial year, in comparison to the 3.7 million tonnes recorded in 2015.

It is hoped that with the recent upswing in coal prices and the stabilisation of the global commodity market, profitability of the project will start to rise in the 2017 year.

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