MAPUTO, March 28 (Reuters) - Brazilian miner Companhia Vale do Rio Doce (VALE5.SA) (RIO.N) has promised to begin developing the $1.2 billion Moatize coal project in Mozambique within three months, Mozambique's mining minister said on Wednesday.
A consortium led by CVRD, the world's top iron ore producer, made the commitment in a development plan recently submitted to the Mozambique government, Mineral Resources Minister Esperanca Bias told state-run radio in the southern African nation.
Bias said the government would work closely with the consortium to ensure it could start construction and other development work at the mine, located 1,700 km (1,056 miles) north of the capital Maputo in Tete province.
"It is our wish that during the first half of this year something visible starts happening in the region of Moatize," Bias said, adding that the government was presently assessing the environment, economic and social impact of the project.
The Moatize mine, which suffered extensive damage during Mozambique's civil war in the 1970s and 1980s, is believed to hold about 2.4 million tonnes of coal reserves, making it one of the largest untapped deposits in the southern hemisphere.
The CVRD-led consortium, which won the rights to rehabilitate the mine through a government tender in 2004, expects to begin production in 2010, with estimated annual output of about 12 million tonnes of coal.
Some of the production will fuel a 2,000 megawatt thermal power station in the country, with the rest mostly destined for export markets. The project includes a 900 km (560 mile) railway linked to a deep water port.
"At the moment we have a team of Mozambicans and Brazilians working in the project, and the timing presented to the government is to start exporting coal by May 2010," Galib Chaim, general director of CVRD-Mocambique, said.
Moatize is the latest in a host of mega-projects designed to diversify Mozambique's fast-growing economy, which is heavily reliant on agriculture and tourism.
It would put the former Portuguese colony, one of the poorest nations in the world, in competition with neighbouring South Africa in the coal export business. South Africa is the world's fourth largest coal exporter.
(Editing by Paul Simao and Tony Austin; via Johannesburg bureau 27 11 775 3165)
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