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Vale Says Mitsui Not Reconsidering Mozambique Coal Venture

Maritime Activity Reports, Inc.

March 31, 2016

Brazil's Vale SA, the world's No. 2 mining company, said on Thursday that partner Mitsui & Co Ltd has no plans to revise the terms of a coal venture project in Mozambique, as reported by a newspaper.
Rio de Janeiro-based Vale said in a securities filing that a recent decision to reduce the accounting value of assets in the project "does not directly impact Mitsui's investment decision" in the asset, adding that both companies are working to conclude long-term financing for the venture.
Earlier in the day, Brazil's Valor Econômico newspaper cited unnamed sources in reporting that Mitsui was seeking to revise terms of the venture with Vale after the Brazilian miner wrote off $2.4 billion in assets in Mozambique.
Mitsui had agreed in 2014 to buy stakes in Vale's Moatize and Nacala projects for $763 million but no investments have been made so far by Mitsui, according to Valor.
The Japanese trader could reduce the expected investments in the projects and change the terms of a project finance contract, originally expected to reach $2.7 billion, Valor reported.
Vale cited a recent comment from Mitsui, released during a earnings conference call, in which the Japanese company said it was in negotiations "for prompt closing of the transaction, including the conclusion of the project finance."
The Moatize mine in Mozambique is Vale's largest investment in coal. The company invested in two railroads in Africa to transport production from the site, which has estimated operational capacity of 22 million tonnes per year.

(Reporting by Silvio Cascione and Guillermo Parra-Bernal; Writing and additional reporting by Marcelo Teixeira; Editing by Frances Kerry and Bill Trott)

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