Mozambique’s Coal Producers Must Lower Logistics Costs

Mineweb reported that attendees of the Coaltrans Mozambique conference were told that the country’s major coal producers, such as Rio Tinto plc (ASX:RIO,LSE:RIO,NYSE:RIO) and Vale SA (NYSE:VALE), need to decrease their logistics costs in order to become profitable.

As quoted in the market news:

‘In order for Mozambican coal producers to be sustainably profitable and not go out of business, the all-in logistics costs component of a Free on Board (FOB) per tonne coal price (i.e. rail access and operations, and port charges) need to be below $35 per tonne. Given current market prices, which are expected to remain subdued for the short and medium terms, at current rail (and even worse by road) and port costs, no company mining coal in Mozambique is profitable,’ Henrique Pinheiro from Ariy Consulting and Advisory said.

Click here to read the full Mineweb report.