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Rio rethinks Mozambique mine

RIO Tinto has launched a broad review of its Mozambique coal business to look at export transport...

Justin Niessner
Rio rethinks Mozambique mine

The formal review comes amid suggestions from coal industry sources with experience in Mozambique that the miner’s management style in the country, including its approach to relations with the government, may have hindered its progress.

Last week Rio said it would write down three-quarters of the value of the $3.9 billion acquisition of Riversdale Mining made in 2011.

The impairment led directly to the departures of chief executive officer Tom Albanese and energy division head Doug Ritchie, and to the appointment of Sam Walsh as Rio’s new global leader.

Chinese news service Macauhub said Rio’s transport and logistical difficulties which caused the drop in production in Mozambique would be addressed by a government review.

“We hope they can show us technical data about these findings for us to carry out our own checks,” Deputy Mining Resources Minister Abdul Razak was quoted as saying.

“[T]he Mozambican government is working with companies so that transport capacity will increase in the short and medium term.

“Of course there is no immediate solution but in the future, not in the medium term, there will be solutions for carrying coal and other products on the Sena line and Nacala line, as well as on other railroads that are due to be built.”

Rio shares the Sena rail line, which runs to Mozambique’s Beira terminal, with fellow Tete region miner Vale.

Vale is planning to build a railway to link up with Nacala and a new coal terminal at Nacala-a-Velha should be operational by 2014.

Major port developments in Beira, Savane and Nacala will also include a 25 million tonne per annum capacity jetty.

Target export capacity for the region is 55Mtpa by 2025.

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