The Indian multinational Vulcan, which extracts coal in the district of Moatize, in the central province of Tete, is reviewing its contracts with several suppliers of goods and services due to the dramatic fall in coal prices on the international market.
According to data from the “Trading Economics” website, in just one year the price fell by 289 dollars per ton, currently standing at 147 dollars per ton. Without much value on the global market, Mozambique's coal exports also tend to fall, which ends up harming the national economy.
“At the end of April 2022, the year in which the Indian company Vulcan started extracting coal in the district of Moatize, Tete province (after the departure of the Brazilian company Vale), the price of the mineral on the international market was 328 USD per ton. However, from May to July, coal appreciated considerably, reaching 408 dollars (in May), 387 dollars (in June) and 405 dollars (in July)”, the document reads.
At the end of August 2022, according to the document, the price rose even further, to 436 USD per ton, but since then the value of coal has fallen drastically, standing at 147 USD per ton in mid-August 2023, which represents a drop of 289 USD per ton, more than half the price of the same month in 2022.
The drastic drop started at the beginning of 2023, because from September to December 2022, the average price at each end of the month was 395.5 USD per ton. In January 2023, however, the price fell to $236 per ton. The price fell further to 189 USD in February and 180 USD per ton in March. In April, the value of coal rose slightly, leaving the price at 191 USD per ton, but in May the price fell to 131 USD per ton . The price per ton was 127 USD in June 2023, 137 USD at the end of July and on August 17 the price of a ton of coal was 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 US$540 million in the first quarter of 2022 to US$460 million in the same period this year.
The fall in the price of coal (among other important commodities) on the international market reflects the prospects of a slowdown in the growth of the world economy.
Anoop Kumar, General Director of Vulcan, quoted by the independent newspaper “Carta de Moçambique”, promised to respond within a few days to questions raised about the mining company's operations in Tete, including rumors that it favors Indian suppliers to the detriment of Mozambican and South African suppliers. Africans, who have been doing 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 market reach global in more than 25 countries and on six continents.
