Vale in $733 million Mozambique coal project sale

Vale in $733 million Mozambique coal project sale

Vale SA (NYSE:VALE)is nearing the completion of a US$733 million equity sale of its stake in the Moatize coal project in Mozambique, to Japan’s Mitsui & Co Ltd (TYO:8031).

The Brazilian mining giant expects to receive the payment from Mitsui by the end of this month, which should conclude the talks which have been ongoing for almost three years.

Mitsui will purchase 15% of Vale’s 95% share in the coal mine, along with 50% of Vale’s 70% holding in the Nacala logistics corridor, a railway infrastructure system connected to the mine.

The company said it would also receive $2.7 billion more upon completion of the transportation system and the financing for the project.

The Moatize basin, located in Mozambique’s Northwest Tete province, holds some of the world’s largest coal reserves, particularly in coking coal which is used in steel production.

Mitsui’s purchase underlines Japan’s growing interest in Africa’s natural resources.