Mauro Neves, Vale - Mozambique Coal - A privilege and a responsibility


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Mauro Neves, Vale delivered the presentation at IMM’s Mozambique Coal Conference 2013.

The IMM’s Mozambique Coal conference features a comprehensive program which discusses the latest mining developments, assesses the way forward for the country’s crucial port and rail progress and examines Mozambican Government policies and the investment opportunities.

For more information about the event, please visit:

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Mauro Neves, Vale - Mozambique Coal - A privilege and a responsibility

  1. 1. 0 0 Mozambique Coal A Privilege and a Responsibility Mauro Neves Global Coal Director The 4th Mozambique Coal & Energy conference 15-16 July Maputo
  2. 2. 1 “This presentation may include statements that present Vale's expectations about future events or results. All statements, when based upon expectations about the future and not on historical facts, involve various risks and uncertainties. Vale cannot guarantee that such statements will prove correct. These risks and uncertainties include factors related to the following: (a) the countries where we operate, especially Brazil and Canada; (b) the global economy; (c) the capital markets; (d) the mining and metals prices and their dependence on global industrial production, which is cyclical by nature; and (e) global competition in the markets in which Vale operates. To obtain further information on factors that may lead to results different from those forecast by Vale, please consult the reports Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian Comissão de Valores Mobiliários (CVM), the French Autorité des Marchés Financiers (AMF), and The Stock Exchange of Hong Kong Limited, and in particular the factors discussed under “Forward- Looking Statements” and “Risk Factors” in Vale’s annual report on Form 20-F.” Disclaimer
  3. 3. 2 2
  4. 4. 3 Our Goal is Zero Harm
  5. 5. 4 Our Goal is Zero Harm Life matters most
  6. 6. 5 Vale in the World Headquartered in Brazil, Vale is a global diversified mining company, with offices and world-class assets on all continents.
  7. 7. 6 Our Coal Business
  8. 8. 7 China JVs: Longyu: coal and related products; Yankuang: metallurgical coke Moatize Coal Project in Mozambique - Phase 1 capacity 11 million tons per year Coal Operations and advanced coal projects in Australia - Integra, Carborough Downs, and Isaac Plains JVs with a nominal capacity to produce up to 8Mta; - Belvedere, Eagle Downs, etc. - Plus 10,000 sq km of coal exploration assets in Queensland Our current global footprint
  9. 9. 8 2013 Moatize 2014 2015 2016 2017 Australia Operations and Projects 47% 63% 64% 70% Current plan aims to achieve over 30 Mtpa of production capacity in the next 5 years, with a diversified platform of growth with projects and operations in 2 continents. We expect Moatize to become our largest coal operation by 2014 50% Production – Marketed tons - Mtpa Production Capacity
  10. 10. 9 Vale in Mozambique, the privilege
  11. 11. 10  Coal-related projects:  Moatize I  Moatize II  Nacala Corridor  Sena Line  Also, a Power Plant is projected to supply our local operations Sena Line Nacala Beira Moatize Nacala Corridor MAPUTO Cahora Bassa Dam HARARE PRETORIA Moatize Coal Project
  12. 12. 11 Industrial Area
  13. 13. 12 Rehabilitation of Beira line to full 6 Mtpa capacity Ramping Up of Moatize since its 2004 Inception Loading of 1st capesize vessel Actions to maximize the Beira line Start-up of railway at Nacala / Moatize expansion production Commissioning of # 2 CHPP Start-up of Nacala railway Q1 ‘15 H2 ‘15Q4 ‘14 Jan ‘13Oct ‘12 Feb ‘13 MOATIZE I - RAMP-UP AFTER MINING START-UP IN 2008 MOATIZE II - IS IN CONSTRUCTION Start coal production Aug ‘11 Start coal exports Sep ‘11 First Train Loaded August 2011 First Cargo September 2011 First Capesize January 2013
  14. 14. 13 Moatize Products VITRINITE Key attributes are:  High hot strength (CSR=69)  High cold strength (M40=84)  High vitrinite (81%) – provides ability to carry more high inerts coals in the blend  Genuine high quality hard coking coal alternative to Australia  Rank/ Volatile Matter and CSR sits close to optimum coke oven coal blend targets, providing flexibility in the number and type of coals used in the blend  Excellent caking properties (G=92) providing ability to be used as the foundation of the coal blend Delivering to our customers, strong coking properties with high carrying capacity for low grade coals.
  15. 15. 14 Hampton Roads Vancouver Praia Mole Beira Constanza GangavaramGoa Beilun Dalrymple Bay Market Regions Supply Regions Rotterdam Kimitsu Fos-sur-Mer Well positioned to supply cost competitive premium hard coking coal to global markets Metallurgical Coal: market and supply regions • Over 3.0Mt of shipments to date • Tested worldwide with over global 30 customers with great success. • Trialed at ratio’s between 10% and 40% of the coke oven coal blend Target Market
  16. 16. 15 Moatize Expansion Project and New Investiments in Africa
  17. 17. 16 Investment planned for the coming years Total Investments: 8,2 bi
  18. 18. 17 Moatize Expansion Project  Additional 11 Mtpa of nominal production capacity, totaling of 22 Mtpa, including duplication of the coal handling and preparation plant (CHPP) and expansion of the infrastructure.  Production is estimated to be predominantly HCC .  Mine Operations Capex: US$ 2.0 billion.  Start up: 2H 2015 CHPP Plateau Retaining Wall
  19. 19. 18 Nacala Project  Capacity: estimated at 18 Mtpa of coal with potential to expand further  Capex: US$ 4.4 billion • US$3.4bn railway • US$1.0bn port terminal  Start up: 2H 2015  Physical Progress: 30% by Jul 13 Nacala corridor: 912 km long railway and port terminal
  20. 20. 19  Railway to link Moatize mine to Nacala, crossing Malawi, comprising the construction of 230 km of new railway sections and rehabilitation of 682 km of the existing railway. 75% 25% Railway Extension 237 km 675 km Mozambique Malawi Railway characteristics Greenfield Brownfield 682 km 230 km 237 km Nacala Railway  Increase the logistics capacity to export coal from the expanded Moatize mine to a new port in Nacala. 230 km 682 km
  21. 21. 20 6 7 8 2 3 5CLIN Greenfield Mz 62.5km CLIN Greenfield Mz 29.3 km VLL Greenfield Mw 138.5 km CLIN Porto CEAR Brownfield Mw 98.6 km CDN Brownfield Mz 504.2 km Nacala Rail Corridor CDN Brownfield Mz 79.1 km GF Moz 91,8 Km BF Moz 583 Km GF Mlw 138,5 Km BF Mlw 98,6 Km
  22. 22. 21 Nacala Port  Natural sea bay with deep water channel (berth with > 20m draft)  Installed capacity for 18 Mpta with potential for further expansions
  23. 23. 22 Environment
  24. 24. 23 Environmental High performance environmental programs such as: • Air quality control • Weather condition control • Control of noise and vibrations • Quality control of water and effluents • Fauna and flora tracking • Waste control • Environmental Management system implemented accorded to ISO 14001 • Environmental training and education program implemented.
  25. 25. 24 Opportunities
  26. 26. 25 Strategy Recruitment & Selection
  27. 27. 26 Strategy Recruitment & Selection Moatize Mine 53% employees from the Mine are from Mozambican central region (Tete and Sofala provinces) Most employees originally from Tete, 35%, are from Moatize district Also, 520 of Vale and contractor employees are from Cateme and 25 de Setembro, ressetled areas
  28. 28. 27 People Development – Professional Training
  29. 29. 28 Training of Hydraulics, Diesel Engines and Electric Grades average Hydraulics : 94,7% Electric: 96,5% Diesel Engines: 97,5%
  30. 30. 29 Local Suppliers 186 211 249 579 Development of local suppliers contracts 2009-2012 Today, 839 companies provide service to Vale, about 200 companies are from Tete Our selection is based on suppliers that are technically and commercially competitive
  31. 31. 30 Social development
  32. 32. 31 The resettlement process of Moatize’s project was the biggest ever realized by Vale, moving more than 5,000 people. Resettlement Program About the program: Total number of people: 5,104 Rural and Urban Resettlement (Cateme and 25 de Setembro) Average of habitants by family: 4.88 hab/AF Total number of families: 1,356 Transferences finalized in September 2011, currently in post-resettlement and social program phase.
  33. 33. 32 Social Investments - Infrastructure improvements
  34. 34. 33 Social Investments - Infrastructure improvements
  35. 35. 34 Lecture about Economic gains of the mining chain Visit of Minarte school Visit of Somane Machado school Visit of Cateme Primary School
  36. 36. 35
  37. 37. 36 Thank you! Mauro Neves Vale Moçambique Maputo, July 2013