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Mozambique approves coal projects, ponders iron-ore proposal
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20th September 2013
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The Mozambique government recently awarded four coal concessions with a total value of $5-billion.

The first of these will start operations next year and they should create more than 1 000 permanent jobs. This information was released by Mineral Resources Minister Esperança Bias at the start of the XXVIII Coordinating Council meeting of her Ministry.

“[They are] the Revobóe mine, with an estimated investment of $746-million and a total production of seven-million tons of coal a year; the Zambeze project, with an estimated investment of $3,3-million, predicted to produce a total of 258-million tons; the Midwest mine, with an estimated initial investment of $758-million, predicted to produce 7,2-million tons; and the Ncondezi project, with an initial investment of $288-million, which will also produce 7,2-million tons,” she enumerated.

The government is confident that the interruptions in mineral production caused by the heavy rains early this year will not damage the growth projects for the sector, once the miners have restored full production.

Research by Mozambique’s Social and Economic Studies Institute, published last week, revealed that, over the period 1990 to 2011, large-scale foreign investment in the country was concentrated in five provinces – Gaza, Nampula, Tete and Zambézia. Each of these has received investments of more than $500-million. Each of these provinces was the site of at least one ‘megaproject’ (as the Mozambicans call them) and these megaprojects were responsible for more than 70% of the investments in each province.

All the megaprojects were concerned with the exploitation of natural resources, which were exported with little or no processing done in Mozambique. The main sectors concerned were mining, particularly coal and heavy mineral sands, and forestry (export of wood).

That Maputo is aware of this is shown by the fact that, at the XXVIII Coordinating Council, it was announced that the government was studying a $1,2-billion proposal to establish a pig iron industry in the country. Mozambique is rich in metallurgical coal, and iron-ore has been discovered in the country. At the start of this year, it was reported that Capitol Resources, a subsidiary of Australian miner Baobab Resources, had discovered a large deposit of high-quality iron-ore in the Chiuta district of Tete province. Inferred iron-ore deposits were 482-million tons. Tete is also the province that is the centre of the country’s metallurgical coal production.

Meanwhile, Brazilian mining major Vale has pointed out that its logistics operation in Mozambique had celebrated the completion of its second year of operation last month. In August 2011, the first train carrying coal from the group’s Moatize mine, in Tete, left for the port of Beira. It carried 2 100 t of coal. Since then, some 1 600 trains have carried 4,2-million tons to the sea.

In addition, Vale is investing more than $1,2-billion in the rehabilitation of existing, and the construction of new, railway tracks through Malawi and Mozambique to link Moatize to the port of Nacala to complement the existing Sena line from Tete to Beira. Work started in 2012 and should be completed during the second half of next year. Some 3 500 construction jobs have been created by the project, with 82% of them held by Malawians. (Most of the new track is being laid in Malawi.) The Nacala line will run for 912 km and has a nominal capacity of 18-million tons a year. It will also be used to transport people and general cargo.

Edited by: Martin Zhuwakinyu

 

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