Vale Plans to Produce Diesel From Coal

9 May 2011

Maputo — The Brazilian mining company Vale announced on Sunday that it intends to install a plant to convert coal into liquid fuels in Moatize district, in the central Mozambican province of Tete.

Vale’s open cast mine in Moatize will produce a variety of grades of coal. While high quality coking coal is mostly for export, some of the thermal coal will supply a coal fired power station that will initially produce 300 megawatts of electricity – and coal with a high ash content can be turned into diesel.

“We shall gasify the coal with a high degree of ash through a process that we shall develop with a Portuguese partner and with a company in Houston, in the United States”, announced the Vale chairperson, Roger Agnelli, at the Sunday ceremony that marked the formal start of mining at Moatize.

Agnelli believed that the “coal-to-liquid” conversion technology is perfectly applicable in Moatize. It could have a major impact on Mozambique, since it will cut the country’s bill for importing liquid fuels.

It would also mitigate the environmental impact of the mine. The director of Vale-Mozambique, Galibo Chaim, explained that the mine will produce large amounts of rejected coal – coal with a high ash content for which there is currently no international market.

“If we don’t do anything with this coal, we will have to put it back inside the mine, which could cause countless problems”, said Chaim.

Vale itself is a major consumer of fuel. Agnelli suggested that the “coal-to-liquid” plant could produce 300 million litres a year. Of this, 120 to 150 million litres would be used by Vale in its Mozambican operations, leaving at least 150 million litres that can supply the Mozambican domestic fuel market.

The project is run by a Vale subsidiary, “Vale Solucoes”, and Agnelli said that within the next few months an economic viability study should be launched.

Vale is also greatly interested in the natural gas discoveries in the Rovuma Basin, in the far north of the country. Agnelli said he also sits on the board of the US company Anadarko “and I was thrilled when they announced the size of the field they have discovered. More than ten trillion cubic feet of natural gas”.

Apart from its use as fuel, or to generate electricity, natural gas is also used to produce the fertilizer needed to increase agricultural production and productivity, another area in which Vale intends to invest.

Vale is also interested in exploiting Mozambican phosphates. Mining the phosphate deposits in Monapo district, Nampula province, is scheduled to begin in 2015.

All this fed Agnelli’s enthusiasm for the country. “Mozambique is a land of opportunities”, he exclaimed. “It’s a land of good people. It’s a land with a democratic government, a competent government that is working with us, supporting us and indicating the correct path that should be taken. What more could anyone ask for?”

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