MAPUTO, Brazilian mining giant Vale has announced the conclusion of the sale of part of its assets in Mozambique to the Japanese company, Mitsui.

Vale said in a media statement here Thursday that it had 733 million US dollars from Mitsui, and expected to receive a further 37 million dollars later in the year.

Under an agreement which took three years to negotiate, Mitsui is purchasing 15 per cent of Vale’s holding in its open cast coal mine at Moatize, in the western Mozambican province of Tete. Vale owns 95 per cent of the mine, while the other five per cent belongs to the Mozambican State.

Mitsui is also purchasing half of Vale’s participation in the Nacala Logistics Corridor (CLN), which comprises the new coal terminal at the northern port of Nacala-a-Velha, and the railway from Moatize to Nacala, which crosses southern Malawi. Fifty per cent of CLN is owned by Vale and the remaining 50 per cent by the publicly owned Mozambican ports and rail company, CFM.

From the Mozambican government’s point of view, perhaps the most significant aspect of this transaction is that Vale is liable to pay a large sum in capital gains tax. The sum has not yet been calculated but earlier this month, the American oil company ExxonMobil agreed to pay the Italian energy company ENI 2.8 billion USD for a 25 per cent stake in offshore Area Four of the Rovuma Basin, off the coast of the northern province of Cabo Delgado, and the Mozambique Tax Authority (AT) calculated the amount of capital gains tax owing at 350 million USD.

With the recent recovery in coal prices on the world market, Vale’s investment in Mozambique now looks like a profitable concern. In 2016, Vale extracted 5.5 million tonnes of coal from the Moatize mine.