* Potential coal partners share long term positive view
* CEO seen no recommendation to close Australia coal mines
* Acquisitions off the agenda (Adds Vale CEO comments)
By Sonali Paul
MELBOURNE, April 3 (Reuters) - Brazil’s Vale SA expects to line up a partner for its coal operations in Australia and Mozambique despite weak conditions facing the industry, its chief executive said on Thursday.
Vale has previously said it was looking to sell a 15-25 percent stake in its coal operations, including its Moatize mine in Mozambique and its Carborough Downs, Integra and Isaac Plains mines and undeveloped projects in Australia.
Vale Chief Executive Murilo Ferreira said on Thursday the company’s Australian mines have “many problems” but the company was taking a long-term view on the industry.
“We have potential investors with the same view, based on a long-term operation. And, for sure, they appreciate to see a partnership with us,” Ferreira said at a mining industry function in Melbourne.
He declined to comment on who the company was talking to.
Asked whether the company was considering shutting any of its Australian mines, Ferreira said he had seen no analysis from his local staff calling for mines to be closed.
He said he was comfortable with the company’s operations in Mozambique despite security threats and said Vale should be able to announce a joint venture soon for its rail businesss in the country.
“I‘m not worried about Mozambique,” he said.
Vale booked a loss of $480 million on its coal business in 2013, mostly from Moatize in Mozambique, which was hit by a sharp rise in rail usage fees and export disruptions due to security threats, while coal prices slumped.
This week, the company suspended operations on its Moatize-Beira coal rail line after one of its trains was hit by gunfire, injuring the driver.
“Operations on the line are temporarily suspended to best allow ongoing investigations,” Vale said late on Wednesday.
Coal exporters in Mozambique, led by Vale and Rio Tinto , have faced a range of challenges trying to get coal out of the country where they have planned to invest more than $10 billion.
Ferreira reiterated his commitment to an austerity drive at the company, saying he would not chase acquisitions, and would focus on boosting returns to shareholders with the help of its huge Carajas iron ore mine opening this year.
“This money can stay much better in the hands of our shareholders,” he said.
The new mine will raise the top global iron ore producer’s capacity by 30 percent to nearly 400 million tonnes a year.
Ferreira expects iron ore prices to hold between $100 and $125 a tonne over the next one to two years. Iron ore last traded at around $115, having recovered over the past month from lows below $105.
“I strongly believe we have good fundamentals,” he said of the iron ore business, adding that analysts who have predicted sharp drops in iron ore prices have failed to factor in the challenge of replacing iron ore reserves.
“Depletion is a key issue for our industry,” Ferreira said. (Reporting by Sonali Paul; Editing by Richard Pullin)