Vale reduces forecast by 30% for coal exports from Mozambique

Moatize railway station at the end of the Sena line in Mozambique

Mining giant Vale (NYSE: VALE) reduced its forecast by 30% for exporting coal from Mozambique, the African Press Agency reported Sunday.

The company said it would now ship 3.4 million tonnes of coal from the Moatize coal project rather than the original estimate of 4.9 million tonnes.

The reduction comes following bad weather and ongoing labour disruptions.

Last week, brickmakers protested low wages by blocking trains for three days. Vale has refused to increase compensation for workers.

Torrential rains and flooding in the Zambezi Valley, in the central part of the country, closed railways in February.

Trains were temporarily stopped on the Sena line that is used to send cargo to the southeastern port of Beira on the eastern coast — causing the company to invoke force majeure on its client contracts.

For next year, the Vale projects 6.4 million tonnes of coal production which will increase to 9.2 million tonnes in 2015.

It also have plans to output 22 million tonnes per year by 2018, however, this depends on export capacity which would require additional railways and port terminals.

Vale is investing $4.4 billion in a new railway, which crosses southern Malawi, in order to ship cargo to the country’s northeastern deep water port at Nacala.

Related: Clashes at coal mine owned by Vale in Mozambique

Image: Teixant, via Wikimedia Commons