Rio Tinto, Vale Should Share Mozambican Rail Link, Minister Says

Rio Tinto Plc and Vale SA should consider jointly developing a rail link to haul coal from Mozambique’s northwestern Tete province to the eastern port of Nacala, Mineral Resources Minister Esperanca Bias said.

“It is our desire, and we believe that the companies will share information and will share capacity that will be available,” she said at the Investing in African Mining Indaba in Cape Town today. That includes “Nacala and other railways that will be built. It’s in our strategy that lines for any product are for free access for other products. It wouldn’t make sense to have a line dedicated only to one product.”

Rio, the world’s second-largest mining company, said Jan. 17 it is writing down the value of Mozambican coal assets acquired from Riversdale Mining Ltd. for A$3.9 billion ($4 billion), less than two years after completing the deal. The southeast African nation has blocked a plan put forward by London-based Rio to move coal shipments by barge along the Zambezi river for export. The company and the government are discussing alternative transport options.

“Various studies have been done about the navigability of the Zambezi river,” Bias told reporters. “The studies done don’t recommend that the river be navigated. There are other alternatives that should be explored. The alternative that’s most efficient is rail.”

Vale, the world’s largest iron-ore producer, is investing $4.4 billion upgrading the Nacala port and building a 912- kilometer (567-mile) railway line linking it to its mines in the Moatize basin in Tete, Rafael Benke, head of corporate affairs, told the conference earlier today.

Mozambique’s government will take a stake in all rail projects in the country and will grant approval quickly if they meet its requirements, Bias said.

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net;

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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