GOLD 1289.44 $/ozChange: 6.07
PLATINUM 1406.50 $/ozChange: 3.50
R/$ exchange 10.63Change: -0.08
R/€ exchange 14.68Change: -0.11
 
We have detected that the browser you are using is no longer supported. As a result, some content may not display correctly.
We suggest that you upgrade to the latest version of any of the following browsers:
         
close notification
powered by
Advanced Search
 
 
 
Home
 
Sector News
 
CSR
 
 
EXTRACTIVE INDUSTRIES
 
Violent protests in Moz gas, mining sectors forecast to surge in coming months
PRINT
 
 
Embed Code Close
content
 
19th April 2013
TEXT SIZE
Text Smaller Disabled Text Bigger
 

Mining and gas projects in Mozambique are likely to be affected by an increase in violent protests in the coming months, as local residents attempt to extract additional compensation from mining companies, especially in regions where projects are entering the construction phase, says political risk forecaster Exclusive Analysis, which was recently acquired by global advisory firm IHS.

Deputy head of Africa forecasting Robert Besseling tells Mining Weekly that, in recent months, there has been an increase in violent incidents at mining development sites in Tete province, in the north-west of Mozambique. Most of these incidents have to do with forced relocations and the lack of skills development in mining-prevalent regions.

As a result, protestors demanding greater benefits from the mining sector have been targeting mining sites and railway lines across the country.

Late last month, local reports voiced the dis- content among Tete community members, who had been forcibly relocated to make way for coal mining operations and were dissatisfied with the compensation they received.

This echoes the protests of Moatize local residents in January 2012, who blockaded the Sena public railway to prevent the transportation of coal from Tete to the Beira port.

Besseling likens the unrest brewing in Mozambique to discontent in the Tanzanian natural gas sector, which has also been experi- encing violent protests, motivated by discontent at relocations and a lack of local development.

“Given that local communities are becoming increasingly active and belligerent against the development of mining projects in Tete and that they are motivated by the protests experienced in Tanzania’s natural gas sector, Exclusive Analysis concludes that Mozambique’s natural gas sector is likely to face similar protests as it develops,” he says.

Besseling tells Mining Weekly that civil protestors sabotaged the construction of liquefied natural gas (LNG) pipelines in Mtwara, which is destined to be the key port for Tanzania’s natural gas sector, in December and January. Damage estimated at $300 000, compounded by about $1-million in overrun costs on the pipeline, was incurred.

However, apart from the pipeline attacks, Tanzanian protestors have not been targeting gas companies, as they blame their local government for not enforcing localisation within the growing energy sector, Besseling points out.

He maintains that this lack of local beneficiation has been the primary cause of the stunted development of LNG infrastructure in Mtwara and predicts that the same turn of events is likely to occur in Mozambique.

“Although Mozambique, like Tanzania, is redrafting its natural gas legislation, its civil activist groups, political opposition and even some members within the ruling party are already criticising the Mozambique government for the lack of wealth and development in the country, ” Besseling says.

He further maintains that neither the political opposition within Mozambique nor the civil activist groups are having any effect on the natural gas legislation yet.

The legislation is drawn up by State-owned companies involved in the petroleum sector and key industry gatekeepers within the natural gas sector who are also involved in the upper echelons of the political system.

Besseling predicts, therefore, that those civil society groups “clamouring for change and greater skills development” are more likely to launch protests at construction sites, owing to their lack of legislative influence.

He highlights US-based independent oil and gas exploration and production company Anadarko Petroleum’s LNG development pro- ject and that of Italy-based integrated energy company ENI, both based in the Rovuma basin, as potential targets that are likely to face these types of protests as soon as construction begins.

Meanwhile, the Mozambique mining sector, which is dominated by mining majors such as Vale, Rio Tinto and the Eurasian Natural Resources Corporation (ENRC), faces ongoing protests.

“The construction of two major railway lines has been disrupted on several occasions in the last 18 months, owing to forced relocations,” explains Besseling.

With no way of transporting its coal stock, Brazil-based diversified miner Vale was forced to stockpile.

Forced relocation disputes are reportedly resolved for now, which means that production will soon be back on track, but Besseling warns that the unrest will not disappear overnight.

Besides the issue of forced relocations, the lack of local beneficiation, environmental damage and a general public perception that foreign investors are exploiting Mozambique remain problematic.

“Vale, Rio Tinto and ENRC, together with other major coal mining players in the country, are likely to have changes made to their contracts over the next few years in terms of local procurement and skills development,” predicts Besseling, adding that changes in taxation and State-ownership policies may also be in the pipeline.

Edited by: Martin Zhuwakinyu

 

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.

FULL Access to Mining Weekly and Engineering News - Subscribe Now!
Subscribe Now Login
 
 
RISING HOSTILITY Local communities are becoming increasingly belligerent towards the development of mining projects in Tete province, and this might also happen in the country’s natural gas sector
 

RISING HOSTILITY Local communities are becoming increasingly belligerent towards the development of mining projects in Tete province, and this might also happen in the country’s natural gas sector
 
ROBERT BESSELING Ongoing protests in Mozambique will ultimately draw attention to the demands of civil activist groups, which suggests expected changes to the mining and natural gas legislation in the coming years
 

ROBERT BESSELING Ongoing protests in Mozambique will ultimately draw attention to the demands of civil activist groups, which suggests expected changes to the mining and natural gas legislation in the coming years
 
 
Previous Play Next