‘Vale Pulling Out - This is the End of Coal’ 26 January 2021

Vale is pulling out of Tete as part of its climate emergency commitment to end coal production. Several announcements last week set out a complex planned withdrawal. Vale announced on 20 January that to allow the Japanese company Mitsui to leave the project, buying its 15% of the Moatize coal mine and its 50% of the 900 km railway and port facilities Nacala Logistics Corridor, for $1. But it will take on Mitsui's $2.5 bn debt. The new wholly owned company will only mine high quality coking coal, and hopes to mine 15 mn tonnes this year and 18 million tonnes next year. But the announcement stressed that Vale wants to disinvest from all coal production…To mine coking coal large amounts of cheaper thermal coal must be removed. When these mines opened, the thermal coal could be sold, but now it cannot and will be left in giant piles. Coking coal will have a market for perhaps a decade more.

…Coking or metallurgical coal remains essential for steel making. A race is on to develop ways to replace it and production of coal free steel should start in the next five years. So there will remain a market for coking coal for another decade. Steel-making dates back 2500 years in Anatolia and East Africa, and blast furnaces were developed in China and East Africa. China now produces half of the world's steel. Tanzanian production was stopped by German colonisers who did not want competition with the growing German iron and steel production. Initially wood was used, but China began using coal in the 11th century. Coal is converted to "coke" by heating it in low oxygen conditions to drive off water and unwanted chemicals. Coke and iron ore is put into a blast furnace to reduce iron ore (Fe2O3) into pig iron (2Fe). Coking coal enters the process again in the next step of converting iron to steel, when it provides both energy and carbon for the final alloy.