Brazil’s Vale has agreed to pay nearly $2.5bn in advance liabilities associated with the financing of the Nacala logistic corridor (NLC) project that serves a coal mine in Mozambique.

With the completion of the payment on 22 June 2021, Vale will have satisfied all the conditions required to complete a deal signed earlier this year.

The deal will see Vale acquiring Mitsui & Co’s 15% stake in the Moatize mine, as well as a 50% interest in the equity and all other minority credits it holds on NLC.

Subject to the completion of the deal, Vale plans to consolidate the Moatize mine and the NLC in its financial statements.

The deal is part of Vale’s plan to exit the coal business. It also aligns with the firm’s strategy to focus on its core businesses and ESG agenda to become carbon-neutral by 2050.

In a press statement, Vale said: “Accordingly, the EBITDA will no longer be burdened with costs related to debt service, investment in maintenance of operations (which will be executed directly by Vale as sustaining capital) and others, financed by NLC’s tariff, and that already discounting the interest received by Vale, impacted the 2020’s EBITDA by approximately $300m.

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By GlobalData

“With the simplification of the governance and management of the assets, Vale continues the process of a responsible divestment of its participation in the coal business, based on the preservation of operational continuity of Moatize mine and NLC.”

In 2017, Vale signed a $2.73bn project financing deal with Mitsui to fund the NLC that will link the Moatize coal mine in Mozambique to the Nacala port.