Mozambique gives green light for Moatize-Malawi railway

The Mozambican government has awarded the tender for construction of the Moatize-Malawi railway and the Nacala-a-Velha branch line to the Integrated Northern Logistics Corridor (CLIN), which is a partnership between Vale Mozambique – a subsidiary of major Brazilian mining firm Vale – and state port and rail company Portos e Caminhos de Ferro de Moçambique (CFM).  

The railway line's route will run through the Moatize coal basin in the central Mozambican province of Tete, across the border into Malawi, where it will run for 238km, and then back into Mozambique to link up with the existing northern rail line to the natural deep-water port at Nacala. The government said that work was scheduled to begin by the end of 2012 and that the project would be completed within three years.

Mozambique also awarded the tender for the Nacala-a-Velha port coal terminal to CLIN. The estimated $1.5 billion needed for both projects will be funded by CLIN, with 80 per cent coming from Vale and the remaining 20 per cent from CFM. Vale will have majority usage rights of the finished train line, boosting the company's capacity to transport coal from Moatize.

Since it began exporting coal last September, Vale has been using the 600-km Sena line which runs from the Moatize coal basin in Tete to the port of Beira, some 900 km south of Nacala. The new route via southern Malawi will be much quicker.

Meanwhile, not only will Malawi benefit from the faster service and reduced transportation costs afforded by the new line, it will also receive $8 million a year in concession fees from Vale.

The rail project is seen as a further step in upgrading the transport infrastructure for Mozambique’s burgeoning mining sector.