MITSUI & Company said it agreed to pay $763 million (R8.72 billion) for stakes in a Mozambique coal project owned by Vale, signaling confidence from Japan’s second-largest trading house in a recovery in coking coal prices.
The Japanese trader will take a 15 percent stake in the Moatize mine and half of Vale’s 70 percent stake in associated rail and port infrastructure, Mitsui said in a statement to the Tokyo Stock Exchange. The company will pay $450 million for the mine and $313m for the infrastructure project, known as Nacala Logistic Corridor, or NLC, it said.
Mitsui, which since 2003 is part of the holding group that controls Rio de Janeiro-based Vale, is expanding partnerships with the world’s largest iron-ore producer after last year announcing the purchase of 20 percent in Vale’s VLI cargo unit for 1.51 billion reais (R6.64bn).
“The partial sale of the troubled Moatize mine and logistics project appears to be at a very attractive price for Vale,” Tony Robson, an BMO Capital Markets analyst, said yesterday.
Vale’s Moatize mine is one of the world’s biggest deposits of coal used for steelmaking, with the company boosting output for the product by 8.4 percent to 2.14 million tons in the first nine months of the year.
Shares of Mitsui dropped 1 percent to close at ¥1 616.5 (R152.5) in Tokyo yesterday. Vale lost 3.4 percent to 18.06 reais in São Paulo on Monday. – Bloomberg