OREANDA-NEWS. June 30, 2011. Brazilian mining giant Vale on Wednesday raised its initial production target for the Moatize mine in Mozambique by 76 percent and expects to quadruple that result in 2012.

Moatize, the Southern Hemisphere's largest coal project, is expected to produce 1.5 million tonnes in 2011 and output will rise to 6.3 million tons in 2012, sales manager Marcelo Matos said during an industry conference in Rio de Janeiro.

The company's previous Moatize estimate for 2011 was for 850,000 tonnes. Rio de Janeiro-based Vale plans to start supplying its clients in October. Most of the output will be coking, or metallurgical, coal used in steelmaking.

"Our objective is to begin production on a large scale next year, and to begin testing the product with clients as of October," Matos said.

Vale, the world's largest iron-ore producer, is expanding its coal mining business to increase the range of products it can offer to steelmakers, its main clients and increase the efficiency of its transport systems.

Ships emptied of iron-ore in Asia can be filled with coal in Mozambique for return journeys to Brazil and other steelmaking markets.

Coking coal is used to remove oxygen from iron-ore and provide the carbon for the carbon-iron alloy that is steel. Vale has also made itself the world's largest nickel producer to supply steelmakers with the metal make stainless steel rustproof.

During the first phase of the Moatize project, production is slated to reach 11 million tonnes per year. About 8.5 million tonnes, or more than three quarters of output, will be metallurgical coal. The rest will be softer thermal coal burned in power plants.

The company plans to spend USD 422 million on the project in 2011.

A second phase, beginning in 2014, is expected to double output to 22 million tonnes per year. Vale is the world's largest miner of iron ore.