Almost 4,000 workers have lost their jobs in the coal mining industry in the western province of Tete over the past year, according to the Maputo daily, Noticias.

The newspaper Thursday quoted Portasio Aurelio, head of the mineral resources department in the provincial government, as telling a Tete provincial conference of the National Youth Council that the losses were because of redundancies brought about by the falling price of coal on the world market.

Not surprisingly, the largest redundancies were made by the largest operator, Vale-Mozambique, the local subsidiary of the Brazilian mining giant, Vale, which operates an enormous open cast coal mine in Moatize district.

In all, 3,937 miners have lost their jobs, and 2,348 of them used to be employed by Vale. Aurelio added that the redundancies also affected expatriates as Vale made 520 of its 535 foreign staff redundant.

The financial crisis facing the mining companies has forced them to cut costs, said Aurelio. Unless the coal price recovers, the companies will face further losses, calling into question the major investments they have made in the industry.

With the Tete coal mines and their associated logistics running massively below capacity, the whole Tete economy is affected. Not only have jobs been lost, but the taxes collected from the companies have declined.

In the first six months of this year, the companies paid 166.3 million meticais (about 2.4 million US dollars, at current exchange rates) in taxes on their coal production. But the tax collection target for the year is 5.6 billion meticais.

The sharp decline in the mining industry has also led to a drastic decline in air traffic to Tete. With the industry in the doldrums, business passengers are simply not flying to Tete.