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Moz mining sector in tough times, but some good news

2nd September 2016

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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The mining sector in Mozambique has been the source of bad news in recent days, largely resulting from low global commodity prices. These prices have caused three mining companies to cease operations in the northern province of Nampula. This has been confirmed by Provincial Mineral Resources and Energy Director Olavo Daniasse. One of these companies has been identified as Indian-owned Damodar Ferro Limitada.

A fourth mining company has announced that it will reduce its activities from this month. Like the three enterprises which have ceased operations in the province, this unidentified business has cited rising production costs and sales not keeping up with these costs as the reason for its decision. News agency Macauhub reports that Chinese-owned Hayiu Mining is “in a difficult situation” but has not yet dismissed any workers. (It is not clear if Hayiu is the company scaling back its operations or if it is another enterprise.)

The situation is causing concern for the provincial authorities, because of the job losses involved. Nampula governor Victor Borges has suggested that the “solution to the economic crisis the country was going through is to increase internal production and raise more taxes”. He believes that collecting more taxes will allow major investments, which will benefit the people.

Next door, in the province of Tete, low global coal prices have resulted in the dismissal of 3 937 Mozambican and 535 foreign workers in the coal sector. This has been reported by Tete Provincial Mineral and Energy Resources Directorate Mineral Resources Department head Protásio Aurelius. Of these, 2 348 Mozambicans and 520 foreigners were dismissed by Vale Mozambique, the local subsidiary of Brazil’s Vale and the owner and operator of the Moatize coal mine, which produces mainly metallurgical or coking coal.

Quite separately, at least four illegal miners were killed recently in the country’s Cabo Delgado province. They were killed when the small, informal, gold mine they were working in collapsed. According to the newspaper O País, the mine, in the Muaja area, was roughly 10 m deep and 30 m long. The miners had no safety equipment or protective clothing, while their colleagues lacked the equipment to dig them out.

When they arrived at the mine, police confiscated equipment and motorcycles from the miners, reportedly to try to dissuade them from continuing their activities. In this they failed, as the newspaper reported that the miners continued their activities to try to obtain gold.

However, there was also some good news for the sector. Also in Cabo Delgado province, Australian miner Mustang Resources announced earlier last month that it had recovered another 19 rubies at its Montepuez project. This followed the discovery of its first ten rubies at Montepuez in July. Like the first ten, these 19 stones were recovered during reconnaissance pitting operations at the site involving five pits.

The 29 rubies discovered so far total 5.79 ct, obtained from processing about 11 t of gravel. “Significantly,” stated the company, “the [pitting] programme has confirmed the existence of a secondary ruby deposit, and identified the gravel beds where the first bulk sample pit will be opened. “Small gravel samples from each pit have been washed in a Bushman jig to test for indicator heavy minerals in the gravel. Recovery of high-quality rubies in these small samples is extremely positive at such an early stage and is a strong leading indicator of potentially high-grade deposits.” The company plans to undertake a bulk sampling operation, involving at least 150  000 t of gravel, to be able to estimate the grade and size of the rubies in the deposits.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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