The value of Mozambique’s mining sector will grow from $259-million in 2012 to $724-million in 2017, and the country could have one of the fastest-growing mining sectors in the world this year. These predictions are from US market research, analysis and business intelligence company Fast Market Research. This growth should happen despite issues of inadequate infra-structure and insecurity (although these increase “downside risks”).

The forecast growth will be the result of a combination of further investments in the country’s “considerable” coal reserves and the “relatively strong” business environment. Mining’s share of the national gross domestic product is likely to rise from 1.8% in 2012 to 2.9% in 2017.

The US company regards Mozambique’s coal sector as still being “nascent” and expects it to expand dramatically in the next few years, driving the expansion of the country’s mining industry. Further, almost all the coal that the country will produce will be exported, probably mainly to China and India, giving the African country the potential to be one of the biggest coal exporters in the world.

Separately, in a press briefing in Maputo, Mozambican Mineral Resources Minister Esperança Bias reported that the country’s minerals sector (mining and hydrocarbons extraction) had seen $2-billion in investments last year. The sector grew by 8% in 2013 – the same as achieved in recent years and which she hoped would continue for the coming years.

However, Fast Market Research noted the country’s inadequate infrastructure was a concern. “A failure to address deficient infrastructure is the most pressing risk to our upbeat view on the Mozambican economy,” it stated. “Transport infrastructure in particular is currently inadequate to get Mozambique’s natural riches to international markets. Failure to address this would negatively impact on our expectation that exports will be a major driver of growth over the coming years.”

The Mozambique News Agency (better known as AIM) reports that Brazilian mining group Vale, whose Moatize coal operation is located in Tete province, hopes to export 11-million tons this year, up from 4.1-million tons in 2012. Just taking the plans of the companies already mining coal in the country into account (and ignoring all those exploring or still developing mines), by 2025, they are projecting production of some 100-million tons. This will have to be moved from the mines to the ports and loaded on ships.

Regarding security, clashes continue between armed elements of the opposition Renamo party and Mozambican security forces (army and police). There have been reports of civilians fleeing their homes in the Gorongosa district of Sofala province and the Homoine and Funhalouro districts of Inhambane province. In a recent incident (January 15), Renamo forces ambushed a column of civilian vehicles escorted by troops in Sofala pro-vince, some 35 km from the town of Vunduzi. In the ensuing 10 minute to 15 minute engagement, three people were killed and four wounded, all of them civilians. Three trucks were damaged.

Nevertheless, the attacks remain sporadic. According to the newspaper O País, in the 288 days between April 4 last year and January 16 this year, political violence claimed the lives of 50 Mozambicans. However, since the the army seized the base of Renamo leader Afonso Dhlakama at Santungira, in the Vunduzi district, in October, violence has increased. Although mainly active in the country’s central region, armed Renamo elements are trying to penetrate the northern and southern regions as well. Renamo maintains that the October operation against Santungira was an attempt to assassinate Dhlakama, who escaped and whose current whereabouts are unknown. The party says that the attacks by its armed units are retaliation for the army’s Santungira attack. The US and European Union have denounced the violence, called for it to end and urged peaceful resolution of the dispute between the Frelimo government and Renamo.

“The government’s attack on Renamo’s base and the latter’s subsequent unilateral cancellation of the 1992 peace deal raise the stakes in Mozambique’s tense political environment,” averred Fast Market Research. “We retain our view that a return to all-out conflict is unlikely mainly because Renamo lacks the military clout and the popular support to sustain a protracted campaign. “However, the latest devel-opments increase the possi-bility that there will be further incidences of violent confront-ation between the two parties, which will disrupt economic activ-ity and sour investor perceptions of the country.”