Communication - Presse

Vale to pay $2.5 bln to settle liabilities in Mozambique mine corridor

• Vale (NYSE:VALE) says it will prepay an outstanding ~$2.5B balance related to project financing for the Nacala logistics corridor that serves the Moatize coal mine in Mozambique.
• The company says the settlement will allow it to complete its purchase of Mitsui’s stake in the Moatize mine and the Nacala corridor, and speed its exit from coal.
• With the closing of the deal for Mitsui’s stake, Vale says it will consolidate the Moatize mine and NLC in its financial statements.
• The company says its EBITDA will no longer be burdened with costs related to debt service, investment in maintenance of operations and other charges that took a ~$300M bite out of EBITDA in 2020.
• Vale said in January that it was buying out Mitsui’s minority stake in the Mozambique mine and port project, ahead of selling the unprofitable asset.

Miner Vale SA VALE3.SA will settle in advance liabilities of around US$2.5 billion related to the project finance for the Nacala logistic corridor (CLN) that serves a coal mine in Mozambique, the company said in a securities filing on Tuesday.

With the payment, scheduled for June 22, Vale said it will have fulfilled all the conditions for completion of its purchase of Mitsui & Co Ltd 8031.T’s stake in the Moatize mine and the logistics corridor.

Payment was necessary as the project finance conditions did not allow Mitsui to sell its stake, Vale’s press office explained.

Brazil’s Vale VALE3.SA announced in January that it was buying out minority stake partner, Japan’s Mitsui & Co 8031.T, in the Mozambique mine and port project, ahead of selling the loss-making asset as it works to become carbon neutral by 2050.

“With the simplification of governance and asset management, Vale continues the process of responsible divestment of its participation in the coal business, based on preserving the operational continuity of the Moatize mine and CLN,” Vale said on Tuesday.

With the closing of the acquisition of Mitsui’s stake, Vale said it will start consolidating the Moatize mine and CLN in its financial statements.

According to the company, its EBITDA will no longer be burdened with costs related to debt service, investment in maintenance of operations and others charges that in 2020 impacted its earnings before interest, tax, depreciation and amortisation by about $300 million.

Source: https://clubofmozambique.com/news/vale-to-pay-2-5-bln-to-settle-liabilities-in-mozambique-mine-corridor-194117/