+27 71 448 3496
leon@whyafrica.co.za

Mining rejuvenates Mozambique’s massive potential

Share Article
Mining rejuvenates Mozambique’s massive potential
The mining industry in Mozambique has seen significant growth over the past 20 years. In picture is Kenmare Resource’s mineral sands operation in the Nampula Province of Mozambique. Image credit: Kenmare Resources.

Mining rejuvenates Mozambique’s massive potential

Foreign investors, especially in the mining sector, are making a welcome return to a resurgent Mozambique.

By Leon Louw, owner of WhyAfrica and editor of the WhyAfrica magazine   

Mozambique is back on the map after a devasting and violent attack by Islamic State-linked militants on the French firm TotalEnergies’s gas project in the Cabo Delgado Province in 2021.

Late last year TotalEnergies announced that it planned to restart the long delayed USD20-billion liquified natural gas (LNG) project this year with the security situation improving markedly after Rwandan, Mozambican and SADC soldiers were deployed in Cabo Delgado in 2023.

The Maputo Development Company’s (MPDC’s) announcement in November last year that the Port of Maputo achieved a record volume of 31.2-million tonnes in 2023, up 16% from 2022, was a good indication that the economy has started moving again, this time in the right direction.

Mining shoots the lights out (Mining rejuvenates Mozambique’s massive potential)

Although the Mozambican mining industry has seen tremendous growth over the past twenty years, the Cabo Delgado insurgency put somewhat of a damper on any new developments.

However, as investors started re-looking their risk profiles and old mining projects were being dusted off, commodities like coal and aluminium were suddenly shooting the lights out.

Moreover, WhyAfrica has become aware of several new greenfields exploration projects across the country. A revitalised commodity sector and increased agricultural activity has done wonders for the Mozambican economy, and the outlook is positive.

According to the World Bank Mozambique’s economy is gaining momentum amid a challenging global context and economic growth reached 4.1% in 2022.

Services and agriculture saw a good performance, thanks to the full resumption of mobility and higher agricultural productivity. Increased external demand and prices for Mozambique’s key export commodities―notably coal and aluminum―have supported the recovery further.

The World Bank states in a recent report that the medium-term outlook for Mozambique is positive but subject to substantial downside risks.

“Growth is expected to accelerate in the medium term, reaching 6% over 2023-2025, driven by continued recovery in services, increased liquefied natural gas production, and high commodity prices.

“However, downside risks linked to climate shocks, security risks, and food and fuel price pressures could lower medium-term GDP growth to 4.5%.”

The rush for critical minerals (Mining rejuvenates Mozambique’s massive potential)

According to Geert Klok, Chairman of the Board of Directors Chamber of Mines of Mozambique (CMM), Mozambique is well positioned to take advantage of the rush for critical raw materials. Mozambique hosts many of the minerals needed to drive the world’s imminent energy transition and also boasts significant deposits of more traditional commodities like coal, gold and mineral sands.

“A number of international players are now present in Mozambique and several companies are exploring the Southern African country’s vast mineral resources. Besides gold, coal and mineral sands, Mozambique hosts substantial deposits of Rare Earth Elements (REE), graphite, lithium, and gemstones,” says Klok.

“Around the active mines, hubs of suppliers have sprung up, particularly in Tete and in Pemba (in Cabo Delgado). In addition, Mozambique benefits from the vast availability of mining suppliers and expertise in neighbouring South Africa,” Klok adds.

Strategically located  (Mining rejuvenates Mozambique’s massive potential)

Located on east coast of Africa, Mozambique has a 2500km long coastline supporting world-class ports. The country has well established transport corridors to the hinterland, namely, the Maputo Corridor in the south, linking with South Africa and Eswatini, the Beira Corridor in the centre, linking with Zimbabwe and the Nacala Corridor in the north of the country, providing the connection with Malawi and Zambia.

Contrary to most other countries in Africa, Mozambique has a surplus of energy, which is mostly generated from hydropower.

Hidroeléctrica de Cahora Bassa (HCB), Mozambique’s hydropower generation company, has a generation capacity of 2075MW.

A further 1500MW is projected downstream on the Zambezi River at the Mpanda Nkua hydropower plant yet to be built. The availability of clean energy will help mining companies towards achieving net zero goals.

“The country has seen instability in recent year in its northern part in the form of jihadist insurgency thought to be closely linked to the discovery and development of vast natural gas fields in the coastal area near the Tanzanian border. The insurgency has largely been contained with the help of the SAMIM (SADC Mission in Mozambique) forces and the Rwandese army,” says the CMM’s Klok.

The CMM represents the vast majority of the active mining companies in Mozambique.

“The CMM has been increasingly vocal in improving the business environment for the mining industry in Mozambique.

“The mining industry will continue to be a principal enabler of the growth of the Mozambican economy,” says Klok.

Mozambique on WhyAfrica’s Road Trip map (Mining rejuvenates Mozambique’s massive potential)

WhyAfrica travelled to Mozambique late last year to determine how we could include Mozambique in the 2024 annual WhyAfrica Road Trip.

Our recce was successful and WhyAfrica will be travelling through Mozambique on the third leg of this year’s epic adventure through South Africa, Zimbabwe, Mozambique, Malawi, and Tanzania.

During this year’s 45-day trip we will attempt to visit more than 30 project sites and interview close to 40 stakeholders in the countries that we visit.

The third leg of our trip is backed and endorsed by the Chamber of Mines of Mozambique (CMM) and our fantastic partners and sponsors, which we will be announcing soon. Remember, we still have limited partnership and sponsorship opportunities available. If you are interested, contact WhyAfrica before the end of May to get the best deal.

This is the first article in a series of articles about mining in Mozambique in the run up to the 2024 WhyAfrica Road Trip.

Continue following WhyAfrica or visit our website to become a member or subscribe to our magazines and newsletters and get all our updates and on the ground information and business intelligence.

WhyAfrica specialises in the sustainable utilisation and responsible extraction of the natural resources in Africa.

Mining rejuvenates Mozambique’s massive potential

Mining rejuvenates Mozambique’s massive potential
Book with Endorphin Expeditions. We create African adventures. https://endorphinexpeditions.co.za/contact/
Share Article

Sectors

AgricultureEnvironmental Management & Climate ChangeEnergyESGInfrastructureMiningPolitical EconomyTourism and ConservationWater Management