Vale, the world’s second-biggest iron-ore miner, is buying out minority stake partner, Japan’s Mitsui & Co, in a coal mine and port project in Mozambique.
Brazil’s Vale stated that it planned to divest its Moatize coal mine and Nacala Corridor rail and port projects in Mozambique, which has seen major losses, to focus on its core operations.
Vale’s coal division posted a loss of $213m (£155m, €175m) in adjusted earnings before interest, tax, depreciation and amortisation in its most recent quarterly result.
The operations are expected to resume productivity this year, to reach a production rate of 15 million tonnes a year in the second half and 18 million tonnes a year in 2022, Vale said.
Mitsui said separately it has agreed to sell its stake in the mine and the infrastructure assets to Vale, the project operator, for $1 each. It aims to complete the transfer by the end of the year.
Mitsui has posted a series of impairment losses, totalling 46.7bn yen, on its Mozambique coal and infrastructure assets, taking the book value of its stake in the Moatize mine to zero.
But, the Nacala corridor rail and port projects still have a book value of about $500m, including its loans, it said.
Mitsui said it is reviewing and forecasts loss from the sale.
Separately, Vale said one of its terminals caught fire on Thursday January 14, but the accident was contained with no victims or environmental damage and that its sales have not been affected.
The fire occurred at one of its piers at the Ponta do Madeira port terminal last week, in Brazil’s northern Maranhão state.