Vale's coal interests

Vale is a Brazilian diversified mining multinational corporation and one of the largest logistics operators in Brazil. The global mining company has interests in coal mining operations in Australia, China and Colombia and is involved in developing new coal mines in Australia, Colombia, Mongolia and Mozambique. Vale states on its website that "current production capacity from our global coal operations is 8 Mtpa (million tons per annum)" The company states that it aims to "produce 40 million tonnes per year by 2016."

In its 2009 annual report the company states that its strategy is to "continue pursuing organic growth in the coal business through the development of the Moatize project in Mozambique, the development of more advanced coal exploration projects in Australia and Colombia, and mineral exploration initiatives in several countries, such as Mongolia." The company, which also has extensive interests in the power generation industry, states that it is looking to invest in coal-fired power stations as well as renewable fuels and natural gas.

The company's coal division is headquartered in Brisbane, Australia.

Existing coal mines

In its 2009 annual report, Vale lists its coal interests as comprising interests in seven mines spread across Australia, China and Colombia. The company's Australian metallurgical and thermal operations are underaken through Vale Australia, which "operates coal assets in Australia through wholly owned companies and unincorporated joint ventures" and its Colombian termal coal mine is operated by Vale Colombia.

Vale Australia has:

• a 61.2% interest in Integra Coal which operates the Integra mine in the Hunter Valley in New South Wales. The mine produces thermal and metallurgical coal. Other partners in the project are NSC, JFE, Posco and Toyota.
• an 80% stake in Carborough Downs mine in the Bowen Basin, Queensland. The mine produces metallurgical coal. Other partners in the project are NSC, JFE, Posco and Tata; and
• a 50% stake in the Isaac Plains mine in the Bowen Basin, Queensland. The mine produces thermal and metallurgical coal. The other partner in the project is Aquila Resources.

The company lists the projected depletion dates of the mines as:

• Integra Coal's South Open-cut in 2010 and the underground Middle Liddell Seam in 2014;
• the Carborough Downs mine in 2022;
• the Isaac Plains mine in 2016;
• the El Hatillo mine in 2021.

Vale also has a 25% share in two Chinese companies, Henan Longyu Energy Resources Co., Ltd, which is commonly referred to as Longyu, and Shandong Yankuang International Coking Company Ltd which is commonly referred to as Yankuang.

Through Vale Colombia, the company has a 100% stake in the El Hatillo mine. The company states that the mine, which is located in 210 kilometers southeast of Santa Marta in the central portion of the Cesar Department in Colombia. The company states that "the concession area is adjacent to the town of La Loma and encompasses an area of 9,693 hectares."

In May 2011 it was announced that Brazilian company Vale began coal production at an open cast mine in Moatize, Mozambique. Mozambique's President Armando Guebuza and Vale Chairman Roger Agnell in early May 2011 detonated the first charge of explosives initiating coal production. President Guebuza declared that the ceremony was the confirmation that "what was previously a dream is now a majestic undertaking in which natural resources are driving the development of Mozambican human resources".

Vale invested about US $2.0 billion in Mozambique as of May 2011, and the company stated that it intended to invest a further US $4.0 billion over the next five years. Vale expected exports of coal to begin within by July 2011, despite delays in rebuilding the Sena railway line, which links Moatize to Beira port. Currently, Vale-Mozambique employs approximately 8,000 workers, more than 85 percent of whom said to be Mozambican. "In the second phase of the project, which is already being developed, we will employ 15,000 workers," said a company spokesman.

Former operations

The company formerly owned and operated the Broadlea mine in the Bowen Basin, Queensland. The mine, which the company had a 100% stake in and had opened in 2006, produced both thermal and metallurgical coal. The company closed the mine in October 2009. "Due to a combination of lower Australian dollar sales prices, continuing low yields and high fixed to variable cost ratios relative to our volumes, the Broadlea Mining operations will cease at the end of November," a company spokesperson stated. However, a former mine employee said that the closure was completely unexpected. "They had just put on all these new guys and changed the roster. Those new guys had left good jobs to come here and they only lasted three days and that was the end of it," he said.

Projects being developed

In its 2009 annual report, Vale states that it has 1,087 million tonnes of coal resources (both proven and probable) across all its projects. However, of that total, 954 million are in the Moatize mine in Mozambique which is currently under development. The company states that the projected depletion date of the project is 2046.

On its website the company also lists two other projects as being developed. These are:

• the Belvedere project, near Moura in Queensland. The company states that "Belvedere’s estimated reserves are 2.5 billion tonnes. The mine is expected to produce over 7 Mtpa and have a lifespan of over 30 years". The company has a 75.5% stake in the project;

• the Carborough Downs project, an underground mine, in the Bowen Basin in Queensland. The company states the project is at "is at the production ramp-up stage. It is due to reach nominal capacity of 4.8 Mtpa in 2011";

• the Ellensfield Coal project, which the company wholly owns;

• the Eagle Downs Coal Project in Queensland, in which the company is a 50% partner.

In an interview with the Courier Mail, Vale's global managing director of coal, Decio Amaral, said that "in seven to 10 years' time I wouldn't be surprised if Vale was one of the four largest players in Australia in terms of coal." Amaral said that "when Vale came to Australia, much more important than the projects was the tenements we got ... 3000sq km in the Galilee Basin and 7000 in the Bowen Basin." He said that he hoped to submit a $1.3 billion development plan for the Eagle Downs project to Vale's board soon and possibly have a decision on the $800 million Ellensfield project by the end of the year.

Contact details

Website: http://www.vale.com/en-US/Pages/default.aspx

Articles and resources

Related GEM.wiki articles

• Australia and coal
• China and coal
• Colombia and coal
• Mongolia and coal
• Mozambique and coal
• Brazil and coal
• Nacala port

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