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Grindrod and Vitol in Mozambique coal partnership

The Maputo coal terminal

Grindrod Limited and the Vitol Group have entered into an agreement regarding the Maputo coal terminal in Mozambique

Energy trading company, Vitol will acquire a 35 pert cent interest in Grindrod, which owns the Maputo coal terminal concession, for US$67.7mn. In addition Vitol and Grindrod will enter into a partnership (65 per cent Vitol / 35 per cent Grindrod) to combine their respective sub-Saharan coal trading businesses.

Integrated logistics services supplier, Grindrod, was awarded the concession to operate this terminal known as Terminal de Carvão da Matola (TCM) until 2033 with an option to extend the concession for a further 10 years. To date US$70mn has been invested in the refurbishment and building of infrastructure, expanding the capacity of the terminal to six million tons per annum. TCM is ideally situated for the export of coal to international markets. The dredging of the port channel was completed in 2011 allowing larger vessels up to Panamax size to enter the port contributing to the port’s competitiveness. The Mozambique government, CFM and Transnet have aligned to promote the delivery of cargo by rail to the port which has seen tremendous improvement in rail delivery.

Demand for capacity at TCM continues to grow which led to the feasibility study for an expansion of capacity by 20mn tons (phase 4) requiring an investment of approximately US$800mn. The expansion project involves excavation and land reclamation; resulting in a footprint of 120 hectares; the construction of two additional berths, a stockyard and railway infrastructure.

“Vitol is the ideal partner to assist us in the coal terminal in Maputo. They have significant experience in building terminals and they are a reputable global trading business,” said Alan Olivier, CEO of Grindrod Limited.

Bob Finch, Head of Coal trading at Vitol, said: “Both parts of this transaction create opportunities to underpin a significant expansion of our coal trading business, which is an increasingly important part of Vitol’s global trading activity.”

The transaction is subject to approval from the Mozambican government.

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