MAPUTO– For the first time, coal mined in the western Mozambican province of Tete will be used on the domestic market, instead of all being exported, under a deal signed between Brazilian mining giant Vale and Cimentos de Maiaia, a cement company in the northern port city of Nacala.

Maiaia is a company inaugurated three months ago in the Nacala Special Economc Zone. It has concluded that buying thermal coal from Vale-Mozambique will reduce its production costs. The initial deal is for an annual purchase of 600 tonnes.

Every quarter we will take about 200 tonnes, and after a year of this contract we shall increase our capacity to use coal from Vale,” a local television station quoted the managing director of Cimentos de Maiaia, Chunjie Gou, as saying.

The figures in the commercial agreement were not revealed, but it has been calculated that Vale will earn more than 60,000 US dollars a year from the sales.

The coal will reach the cement company along the Nacala Logistics Corridor (CLN), the railway that runs from the Moatize coal basin in Tete across southern Malawi and onto the mineral port of Nacala-a-Velha, on the coast of Nampula province in northern Mozambique.

The railway is handling 1.3 million tonnes of coal a month, overwhelmingly for export. Since the line began operations two and a half years ago it has transported more than 20 million tonnes of coal to the port.

In the history of our Nacala Corridor, we have become used to exporting,” said CLN Managing Director Jose Carlos. He regarded the deal between Vale and Cimentos de Maiaia as very important, and an added value for CLN.

This year’s plan is to transport more than 13 million tonnes of coal along the 912-kilometre line from Moatize to Nacala. The coal trains normally consists of 120 wagons and take 31 hours to make the journey.

Within two years, the Nacala-a-Velha port is expected to reach its maximum capacity of handling 18 million tonnes a year. Thes open cast mine operated by Brazilian mining giant Vale at Moatize can produce 22 million tonnes of coal a year. Vale owns 50 per cent of CLN, and the other 50 per cent is held by the Japanese multinational, Mitsui.