Vale Mozambique’s coal sales volume reached 1.5 million tons during the fourth quarter of last year.
Revenue, set at $122 million, was higher than in the third quarter ($103 million), due to a combination of higher sales volumes and higher average realized prices.
Fourth quarter 2020 results also indicate that coal production totaled 1.2 million tons, with the total for the year standing at 5.9 million, reflecting the impacts of the Covid-19 pandemic.
Production slowed in the same period due to the start of the general maintenance project at the mining complex and was 12% lower than the previous quarter. On the other hand, stock levels supported the increase in sales.
The first phase of the processing plant renovation project is underway and on schedule, with completion scheduled for the first quarter of this year.
The ramp-up is scheduled to take place starting in the second quarter of 2021 and should last until the end of June.
The goal is to reach a production rate of 15 million tons per year in the second half of the year and a total volume of 18 million in 2022.
During the fourth quarter of 2020, coal adjusted EBITDA (pre-tax earnings) was negative $295 million, down $60 million from the third quarter.
The year 2020 was marked by the adoption of measures to combat the new coronavirus, a priority for Vale which, despite the challenges, continued to act positively with the communities where it operates.
Vale Mozambique is governed by world-class safety standards, and since the beginning of the pandemic it has reinforced all its prevention measures, in order to guarantee the safety and wellbeing of its employees, stakeholders, communities and society in general.
At the same time, the company has been helping the country’s health authorities in the fight against the pandemic, through multiple supports that are reflected in a better and faster assistance to the victims of the disease.
Meanwhile, other information indicates that the main coal mines in Mozambique have lost a third of their production and more than half of their sales revenues, worsening the loss in 2020, compared to the previous year, according to data released by the Brazilian company Vale, in Maputo.
Total production for the year “stands at 5.9 million tons, reflecting the impacts of the Covid-19 pandemic,” the statement read, after production of 8.8 million tons in 2019.
According to Vale’s 2020 financial results, net revenue from coal sales fell by billions of dollars in 2019 to $473 million, a 54% drop.
The coal segment’s loss worsened by 74%, from $533 million in 2019 to $931 million, according to adjusted operating results (EBITDA).
In addition to the Covid-19 impact, “production slowed in the fourth quarter due to the start of the general maintenance project at the mining complex” in Moatize, Tete province.
Vale announced in January that it is seeking a buyer to leave the operation in Mozambique and intends to hand over the mines with increased production capacity.
Coal is one of Mozambique’s main export products and Vale employs about 8,000 people, close to 3,000 of its own employees and the rest subcontracted.
