Rio bids for Mozambique rail tender

RIO Tinto has been named as one of six preferred bidders for a $3 billion railway and port development project in Mozambique.
Rio bids for Mozambique rail tender Rio bids for Mozambique rail tender Rio bids for Mozambique rail tender Rio bids for Mozambique rail tender Rio bids for Mozambique rail tender


Staff Reporter

The country’s Transport Minister Paulo Zucula told Reuters that apart from Rio Tinto, the final six consisted of mostly logistics companies, with a winner to be chosen by July.

“We had 21 companies in the pre-selection phase and we have selected six preferred bidders, who are now preparing their full bids," Zucula said.

The tender is for a 525km rail line from the coal-rich Tete province to Macuse in Mozambique's Zambezia province.

It also includes the development of a port with an initial coal export capacity of 25 million tons, with the potential to double it to as much as 50Mt in the future.

The coal-rich region has been plagued by infrastructure and logistics issues which have disrupted Rio, Vale and other investors in the region.

Rio wrote down $3 billion of its Mozambican assets in January, partially because of infrastructure constraints.

Meanwhile, Anglo American recently announced it had decided not to proceed with a $555 million acquisition of a metallurgical coal project in Tete.

Vale called a force majeure on its exports after the recently upgraded Sena line, the only railway linking the coal-rich Moatize basin with the Beira port, was flooded earlier in the year.

Vale is now investing $4.4 billion to revamp another, much longer railway line from Tete to a port in Nacala.

Zucula told Reuters he did not foresee any problems in companies sourcing funds to pay for the infrastructure, but he expressed concern that delays may force some steel producers, especially from Asia, to source their coking coal from elsewhere.

"In terms of timing, I am really concerned, so that's why we are pushing," he said.

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