Vale halts Mozambique coal shipments after rebel attack on train

Brazilian giant Vale (NYSE:VALE) said on Wednesday it has suspended coal shipments from its mines in Mozambique after a Vale train carrying coal from the Moatize mining complex came under gunfire.

The attack, which injured a train conductor, is being blamed on disaffected members of Renamo (Mozambican National Resistance), the Western-backed rebel movement that battled the government during the Southern African nation’s 16-year civil war.

In June last year Renamo also threatened the Sena Railway line which is the sole link to the Beira port for a handful of coal mines operated by Anglo-Australian giant Rio Tinto and Vale located in central Tete, a province in Renamo’s heartland.

Shortly after that Mozambique troops attacked the base of Renamo’s leader, Afonso Dhlakama in central Mozambique, sending him into hiding.

Renamo said the attack signaled the end of the Rome Peace Accords, the 1992 deal that ended the civil war that began not long after independence in 1975 during the height of Africa’s Cold War proxy fights and killed an estimated 1 million people.

Mozambique is holding general elections in October and Frelimo is widely expected to be returned to government.

The Wall Street Journal reports Portuguese-speaking Mozambique is “the biggest destination for Vale’s investments after Brazil, receiving 22% of the company’s capital expenditures.”

Vale plans to spend just over $2 billion through 2015 to construct a second open pit at Moatize to up annual production to 11 million tonnes. The company also aims to finish its more than $4.4 billion transport corridor to the Nacala port by the end of this year.

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