Vale to pay off $2.5 billion Mozambique debt in attempt to sell project

Vale to pay off $2.5 billion Mozambique debt in attempt to sell project

Posted on by admin

Brazilian miner and iron ore producer Vale said this week it will pay off a $2.5 billion debt at the Nacala Logistics Corridor (NLC) in Mozambique, of which Vale owns a portion. Vale, which has agreed to buy Mitsui’s shares in both the Nacala and the Moatize coal mine projects, said the debt payment is scheduled for June 22.

With the full debt payment, which is related to financing provided by banks to support the Nacala Logistics Corridor, Vale will be able to meet all conditions to buy Mitsui’s stakes in both the Moatize and Nacala projects, the Brazilian miner said.

“After (closing the transaction), Vale will consolidate the Moatize mine and the NLC in its financial statements. Accordingly, the EBITDA will no longer be burdened with costs related to debt service, investment in maintenance of operations (which will be executed directly by Vale as sustaining capital) and others, financed by NLC’s tariff, and that already discounting the interest received by Vale, impacted the 2020’s EBITDA by approximately $300 million,” Vale said in a statement.

Vale has already said that it after it fully owns the two projects it will be able to sell them to an interested investor. The future asset disinvestment is part of a Vale’s plan to focus on core businesses.

Leave a Reply

Your email address will not be published. Required fields are marked *