Vulcan, an India-based multinational company that mines coal in the Moatize district, central Tete province, in Mozambique, is currently reevaluating its contracts with several suppliers of goods and services. This is due to the significant decline in coal prices on the global market.
Based on information from the “Trading Economics” website, the price of coal suffered a significant drop of 289 dollars per ton in a single year. Currently, the price is at US$ 147 per ton. As a result of the global market's limited interest in Mozambique's coal exports, there is a tendency for its exports to decline. Ultimately, this has a negative impact on the national economy.
According to the document, in the year that Vulcan, an Indian company, began extracting coal in the Moatize district, Tete province, the price of coal on the international market was 328 dollars per ton at the end of April 2022. However , in In the subsequent months, from May to July, the value of coal recorded significant growth, with prices reaching 408 USD in May, 387 USD in June and 405 USD in July.
According to the document, the cost of coal increased to $436 per ton at the end of August 2022. However, the value of coal has dropped significantly since then, now standing at $147 per ton in mid-August 2023 This indicates a sharp drop of US$ 289 per tonne, which represents more than half the price of the same month in 2022.
In early 2023, a sharp drop in coal prices was observed. This contrasted with the average price of US$ 395.5 per ton at the end of each month from September to December 2022. The price plummeted to US$ 236 per ton in January 2023, followed by a further drop to US$ 189 and US$ 180 per ton in February and March, respectively.
In April, there was a slight increase in coal prices, with the value per ton reaching 191 dollars. However, in May the cost fell sharply to $131 per ton. In June 2023, the price fell further to US$127 per ton, with a small increase to US$137 per ton in late July. As of August 17, 2023, the current price per ton of coal is US$ 147.
According to the Quarterly Balance of Payments Report recently released by the Bank of Mozambique, coal exports recorded a decline in the first quarter of 2023. This was attributed to the low value attributed to it in the global market.
According to data from the Bank of Mozambique, revenues generated through coal exports declined from US$540 million in the first quarter of 2022 to US$460 million during the corresponding period of the current year.
The drop in the value of coal, as well as other significant commodities, observed on the global market, indicates a possible slowdown in the development of the world economy.
According to the independent newspaper “Carta de Moçambique”, Anoop Kumar, General Director of Vulcan, promised to answer questions about the company's activities in Tete within a few days. Some of the concerns raised include speculation that Vulcan prefers Indian suppliers to those from Mozambique and Southern Africa, despite the latter having conducted business with Vale for a long period of time.
From April 2022, Vulcan took over as the operating company of the Moatize Coal Mine. This mine is a subsidiary of Vulcan International and is entirely owned by them. Vulcan International has connections with one of the largest steel producers in the Middle East and has a diverse range of products. They also have a global presence in more than 25 countries, spanning six continents.
