Vale has signed a $2.73-billion funding deal to finance the Nacala Logistics Corridor (NLC), together with its Japanese partner Mitsui & Co.
Nacala corridor will connect Moatize coal mine to the Nacala port, an investment expected to prop up Brazil’s largest diversified miner – Vale.
The deal included a loan of $1.03-billion from Japan Bank for International Cooperation and another $1-billion from a syndicate of financial institutions.
In addition, Export Credit Insurance of South Africa will also pitch in $400-million, drawing on lending partners Absa Bank, Investec Bank, Rand Merchant Bank and The Standard Bank of South Africa.
The African Development Bank is also to provide $300-million for the railway project, a 237 km section of which crosses Malawi.
Vale said that financing for the 912 km project will be repaid over 14 years, through a tariff on the coal transportation services and from general cargo services provided by the NLC.
Meanwhile Mitsui bought a 15% interest in Vale’s 95% share in the Moatize coal mine in March and also bought half of Vale’s 70% stake in the NLC.
“Vale wishes that the Nacala project finance becomes a postcard and a benchmark for the attraction of other large-scale investments in both countries (Mozambique and Malawi),” it said in a statement.
Global law firm White & Case has advised Vale and Mitsui on the landmark financing for the NCR and port development.
