Rio Tinto is currently in discussions with the Mozambican government to find a viable logistics solution for transporting coal from its mining operations in Tete province.
Alan Davies, the head of the group’s diamond and mining division, made the announcement during the 19th annual Mining Indaba conference held in Cape Town. He emphasized that the company’s main objective is to reach an agreement that is beneficial to both Rio Tinto and the Mozambican authorities, which would allow the coal asset to be operational.
The need for an alternative transport route has become critical, as existing infrastructure poses significant limitations to efficient coal exportation. The Tete region, rich in coal reserves, lacks reliable transport networks, which has hampered Rio Tinto’s ability to fully utilize its investment. The group is therefore exploring various options, including rail and port developments, to ensure cost-effective and sustainable coal transportation.
Challenges
This move comes shortly after Rio Tinto announced a substantial write-down of US$3 billion related to its acquisition of assets from Australian-based Riversdale Mining. The acquisition, completed less than two years ago, has faced several challenges, including logistical constraints and regulatory hurdles, which have contributed to the impairment.
Despite the setback, Rio Tinto remains committed to its operations in Mozambique and is seeking long-term, strategic partnerships to support infrastructure development. The company hopes that successful negotiations with the government will unlock the full value of its coal assets and contribute positively to Mozambique’s economy.
By resolving the logistics issue, Rio Tinto aims to enhance the efficiency of its supply chain, minimize losses, and strengthen its position in the global coal market. The outcome of the ongoing discussions will likely have a significant impact on the company’s future in the region and the development of Mozambique’s mining sector.
