Resolute Mining says it will pay Mali $160 million in tax dispute
The company’s shares in Sydney were suspended on Thursday, after tumbling 40% since news of the detention of CEO Terry Holohan.
Mozambique Mineral Resources Minister Esperanca Bias said Monday the southern African nation will open bidding on new exploration licences for coal soon.
“Between this week and next we will issue new bidding as we are going to revoke some licenses where the holders didn’t fulfill contractual requirements,” Bias told Bloomberg.
Bias said the licences will be issued in accordance with a new mining law requiring between 5% and 25% local ownership of resource projects. The new law is awaiting parliamentary approval, expected by the end of June.
Anglo-Australian giant Rio Tinto (LON:RIO) and Brazil’s Vale SA (NYSE:VALE) have invested heavily in Mozambique’s high-quality coking coal fields in recent years, but both miners have run into difficulties.
Shipments along the Sena Railway line which is the sole link to the Beira port for a handful of coal mines operated by Rio Tinto and Vale located in central Tete province have on a few occasions been halted by bad weather and disruptions caused by 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.
Rio Tinto acquired its Mozambique project in 2011, after buying Australia’s Riversdale Mining for $3.7 billion, but last year took an asset impairment charge of $3 billion on the coking coal venture citing challenges in building the necessary infrastructure to bring the project on stream.
While Anglo American (NYSE:AAL) last year walked away from the Revuboe project in the country, Vale has made Portuguese-speaking Mozambique its biggest destination for investments after Brazil.
Vale plans to spend just over $2 billion through 2015 to construct a second open pit at Moatize in Tete 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.
According to data supplied by The SteelIndex spot Australian hard coking coal (FOB Australian east coast exports) traded at $101.60 a tonne, after falling to record lows in April of $97.80.
The Chinese spot import price for hard coking coal was pegged at $112.80. Only around 25%–30% of the seaborne metallurgical coal trade is sold on a spot basis, but its importance is growing rapidly driven in part by China’s increasing dominance as an importer.
Quarterly benchmark coking coal traded as high as $330 a tonne in mid-2011 after bad weather took much of Australia’s supply off the market and stayed above $200 for two years between September 2010 and September 2012, before slumping to $120 during Q1 2014.
Image courtesy of Rio Tinto Coal Mozambique
