The loss suffered by Brazilian mining group Vale’s Moatize coal operation in the Tete province of Mozambique last year, in terms of adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), was significantly less than the loss suffered in 2015. This was reported in the miner’s recent publication, ‘Vale’s Performance in 2016’. The losses in 2016 came to $105-million, compared with $508-million in 2015. This improvement was largely the result of lower costs and expenses (after adjusting for the effects of variations in volume), which contributed $344-million to the improvement, and higher sales prices ($140-million).
“Adjusted Ebitda for coal shipped through the Nacala port was $110-million in 2016, while adjusted Ebitda for coal shipped through the Beira port was negative $21-million,” stated the report. For the coal shipped through Nacala, the production cost per ton (free on board cash cost, at the port, including the mine, the plant, the railway and the harbour) was $110-million last year, while for the coal shipped through Beira, the production cost per ton (after adjustments to account for the effects of volumes and fluctuations in the exchange rate) was $143.3/t in 2015.
“Costs and expenses, net of depreciation, decreased to $782-million in 2016, compared with $804-million in 2015. “After adjusting for the effects of higher volumes ($322-million), costs and expenses decreased to $344-million in 2016, compared with 2015, as a result of the ramp-up of the Nacala logistics corridor and the Moatize [Phase] II coal handling and processing plant.”
In total, Moatize sent 8.8-million tons of coal down both the Sena (to Beira) and Nacala railway lines last year. Of that, 8.7-million tons was loaded onto ships and exported, representing a 136% increase over the 2015 figure of 3.7-million tons. This jump was made possible by the ramping-up of operations along the Nacala logistics corridor. The mine now produces three types of coal – Chipanga hard coking coal, Moatize low-volatile hard coking coal (launched recently) and Moatize thermal coal.
Regarding the last quarter of last year (4Q16), there was a very large increase in adjusted Ebitda for the coal transported down the Nacala line, compared with the third quarter (3Q16). The figure for 4Q16 was $163-million, compared with minus $7-million during 3Q16. The adjusted Ebitda for Moatize coal shipped through Beira during the fourth quarter was minus $21-million.
“The metallurgical coal realised price, including Moatize coking coal products and Carborough Downs [in Australia] hard coking coal, increased 137% to $216.9/t from the $91.04/t recorded in 3Q16,” reported Vale. “Seaborne coking coal prices maintained an upward trend in 4Q16 until peaking at $310/t by late November 2016 and easing back to $230/t by the end of 2016.”