Maputo, 4 Sep (AIM) – The Indian multinational Vulcan, which is mining coal in Moatize district, in the central Mozambican province of Tete, is revising its contracts with various suppliers of goods and services because of the dramatic drop in coal prices on the international market
According to data from the “Trading Economics” website, in one year alone, the price has fallen by 289 dollars per tonne, and currently stands at 147 dollars per tonne. Without much value on the global market, Mozambique’s coal exports also tend to fall, which ultimately harms the national economy.
“At the end of April 2022, the year in which India’s Vulcan began mining coal in the Moatize district of Tete province (after the departure of Brazil’s Vale), the price of the mineral on the international market was 328 USD per tonne. However, from May to July, coal appreciated considerably, reaching 408 dollars (in May), 387 dollars (in June) and 405 dollars (in July)”, reads the document.
At the end of August 2022, according to the document, the price rose still further, to 436 USD per tonne, but since then the value of coal has fallen dramatically, standing at 147 USD per tonne by mid-August 2023, which represents a fall of 289 USD per tonne, more than half the price in the same month of 2022.
The drastic drop began in early 2023, because from September to December 2022, the average price at each end of the month was 395.5 USD per tonne. In January 2023, however, the price fell to 236 USD per tonne. The price fell still further to 189 USD in February and 180 USD per tonne in March. In April, the value of coal rose slightly, with the price standing at 191 USD per tonne, but in May the price fell back to 131 USD per tonne. The price per tonne was 127 USD in June 2023, 137 USD at the end of July and by 17 August the price of a tonne of coal stood at 147 USD.
With its low value on the international market, coal exports fell in the first quarter of 2023, according to figures published a few days ago by the Bank of Mozambique in its Quarterly Balance of Payments Report.
The Bank of Mozambique shows that revenues from coal exports fell from 540 million USD in the first quarter of 2022 to 460 million USD, in the same period this year.
The fall in the price of coal (among other major commodities) on the international market reflects the prospects of a slowdown in the growth of the world economy.
Anoop Kumar, Vulcan’s General Manager, cited by the independent newsheet “Carta de Moçambique”, promised to respond within a few days to questions raised about the mining company’s operations in Tete, including the rumours that it favours Indian suppliers over Mozambicans and South Africans, who have done business with Vale for years.
Since April 2022, Vulcan has been the operating company of the Moatize Coal Mine, a 100% subsidiary of Vulcan International, with shareholder links to one of the largest steel producers in the Middle East, which has a diversified product portfolio and global market reach in more than 25 countries and on six continents.