Mozambique’s resource potential

2019-10-04T11:14:58+00:00 October 4th, 2019|MTE Exhibitions|

Following a short break, travelling exhibition Mining and Technical Exhibitions (MTE) returned to Mozambique to host an exhibition in Tete over two days at the end of July. The decision to return to Mozambique was motivated by a significant improvement in southern African country’s mining industry, writes Dineo Phoshoko.

Reclaimer at work Moatize Coal Mine’s stocking yard. Image credit: Marcelo Coelho / Vale

Reclaimer at work Moatize Coal Mine’s stocking yard. Image credit: Marcelo Coelho / Vale

Coal, graphite, gold and bentonite are some of the minerals found in Mozambique. In Mozambique coal mining is the fastest growing industrial segment. Significant reserves of coking coal have been discovered in Tete province and the Zambezi area, which have attracted several prominent mining companies.

Development projects

Brazilian mining giant, Vale, developed the Moatize coal mine in Tete – with the mine producing coal for the past eight years. In addition, the company has invested in developing two railroad projects – the Sena railroad project and the Nacala corridor project – to transport coal from Moatize mine to the seaport for exports.

The 575km long Sena railroad project is already in operation and connects the Moatize mine to the port of Beira in southern Mozambique. It has a transport capacity of six million tons of coal a year.

The Nacala corridor project, which is currently under development, will connect the Moatize mine to the port of Nacala. The 912km long corridor will transport approximately 18 million tonnes of coal, derived from the expansion of Moatize mine through a railway system connecting the existing mine in Moatize to a new coal terminal in Nacala Velha (Mozambique). The project was funded by Vale and has the potential of being developed into a transport corridor for Mozambique’s Tete Province, and possibly Zambia and the Democratic Republic of Congo (DRC). The railway line is in the northwestern region of Mozambique, starting at Moatize in the Tete Province, going through Malawi and connecting to the existing railway network at Nkaya Junction.

In addition to minerals, Mozambique also has natural gas reserves. Since the discovery of the natural gas in the northern region of Cabo Delgado, there has been a lot of investments for the development of a liquified natural gas (LNG) project. The project will be operated by US energy company Anadarko and will cost over USD20-billion.

With approximately 75 trillion cubic feet of recoverable natural gas discovered, the Mozambique LNG project will see the country become a major energy supplier to Africa and the rest of the world.

Although there is progress in Mozambique’s mining and energy industries, there are still many obstacles to overcome. KPMG’s Country Mining Guide highlights a lack of infrastructure as one of the main challenges facing the country’s mining industry. The other challenge is related to safety and security, with the terroristrelated attacks in the Cabo Delgado province. The attacks were mainly driven by the LNG project development in the region.

Fortunately, Mozambique’s stable political and mining regulatory framework make it attractive from an investment viewpoint. Such stability will contribute to the country’s mining and energy development.