Notwithstanding concerns about security and lack of rail, road and port infrastructure, foreign companies are con- tinuing to enter the Mozambican mining sector. Ratings agency Fitch recently pointed out that foreign direct investment in coal and natural gas projects in the south east African country was running at about $5-billion a year, and that these two sectors alone would be able to give Mozambique economic growth of between 7% and 8% a year from now until 2015.
Despite noting the risks of increased political violence, limited infrastructure hampering commodity exports and of a fall in commodity prices, the agency expressed optimism about the country. In comparison to the other countries of Southern Africa, Mozambique had inflation below the regional average and growth well above the regional average. Over the past five years, the country had experienced an average annual growth rate of 7.1%. It continued with prudent economic policies and reforms. As a consequence, the agency upgraded Mozambique’s rating from B to B+, with a stable outlook.
Just the past couple of weeks have seen seve- ral announcements by foreign enterprises of mining projects in Mozambique. Africa Great Wall Mining Development Company, a Chinese enterprise, announced that it will start, before the end of this year, to explore for heavy mineral sands in the Chinde, Inhassunge and Nicoadala districts of Zambézia province. This will be conditional on the approval of the requisite environmental-impact assessment (EIA) by the provincial government. The EIA is being carried out by RMS Consultores and will be submitted for consideration next month. The project will require an initial investment of $130-million, and, if it bears fruit, will require the construction of a terminal at the port of Quelimane, the improvement of local roads, as well as the execution of social projects.
Meanwhile, Australian junior Queensland Bauxite Limited (QBL) revealed that it had entered into an agreement with another Australian junior miner, the unlisted Regius Coal Mining, in terms of which QBL will acquire a 35% interest in Regius Coal SPV, the Regius Coal Mining subsidiary which has interests in two Mozambican coal exploration licences. The deal will cost $750 000 (US, not Australian). The licence properties are in the Zambezi coal basin in Tete province and are close to Vale’s Moatize and Rio Tinto’s Benga operations. Regius Coal SPV has an 80% share in one of the exploration projects and a minimum share of 20%, with the right to acquire up to 85%, of the other. (The company will use the $750 000 it will obtain from QBL to secure its initial 20% in the latter exploration project.) QBL has the option to increase its stake in Regius Coal SPV to 51% for an aggregate amount of $1.2-million.
Separately, Indian-owned company Afrifocus Resources has acquired a licence to explore for heavy mineral sands on the islands along the coast of the Angoche district in Nampula province. The exploration area is in the Aúbe local government area, includ- ing the island of Catamoio. The company is looking for ilmenite and/or rutile, with the aim of obtaining titanium, but is also inter- ested in any other economically viable mineral resources, such as zirconium. A Chinese company, Ayu Mining, is already exploring for heavy mineral sands in the Angoche district, while Afrifocus has had a three-year exploration licence for tantalite in the district of Gilé in Zambézia province since 2011.
Meanwhile, coal has played a major role in a dramatic increase in Mozambican exports to India. In the 2012/13 financial year coal (metallurgical and thermal) became, for the first time, Mozambique’s number one export to the South Asian country, the Indian High Commission in Maputo has reported. And Mozambique’s exports to India during that year were an impressive 184.94% higher than in the previous financial year (2011/12) – $280.41-million in comparison to $98.77-million. Total bilateral trade between the two countries was up 102.83% to $1 281.41-million (as against $631.32-million in 2011/12).
Indian exports to Mozambique rose 87.68% to $1 001-million (from $533.35-million).