13 May 2009
Maputo — The amount of direct investment in geological and mining activity in Mozambique rose from 101 million US dollars in 2004 to 804 million dollars in 2008, the Minister of Mineral Resources, Esperanca Bias, told the country's parliament, the Assembly of the Republic, on Wednesday.
As a result the value of mining production rose from 937.1 million to 7.3 billion meticais (from 35.2 million to 275 million dollars, at current exchange rates) over the same period.
The most significant recent investment was that by the Irish company Kenmare Resources in the titanium bearing heavy mineral sands deposit in Moma district, on the coast of the northern province of Nampula. Bias said that this investment of 460 million dollars created 1,582 jobs during the constriction phase and 450 jobs in the current production phase.
Since the start of production in April 2007, she said, the mine and its associated processing plant have produced 701,577 tonnes of titanium concentrate. The total taxes that this project has paid to the state so far amount to 9.9 million meticais (about 372,000 US dollars).
The Moma project could be dwarfed by the plans for massive coal mining in the Zambezi valley. Currently the only coal mine in operation, Chipanga XI, is small scale, and has produced about 122,000 tonnes since 2005. 55,500 tonnes has been consumed domestically, mostly by the tobacco processing plant in Tete city, and by the sugar industry. The other 88,700 tonnes has been exported to Malawi, Zambia and the Democratic Republic of Congo.
But the Brazilian mining giant Vale is beginning to develop its mining concession at Moatize, where the first stone was laid at a ceremony in March, attended by President Armando Guebuza. Bias gave investment in this open-cast mine as 1.26 billion dollars. She said it would produce 8.6 million tonnes of coking coal a year (mostly for export) and 2.1 million tonnes of thermal coal. Vale plans to use the thermal coal in a 1,500 megawatt power station that it will build at Moatize.
Next door to Moatize, in the locality of Benga, is a second coal mining concession, granted to the Australian company Riversdale. This could prove even larger: Bias said the production targets are for eight million tonnes of coking coal and four million tonnes of thermal coal a year.
Bias argued that the issuing of mining certificates to Mozambican individuals and companies for gold and gem mining had helped combat illegal mining. She said the amount of gold entering the legal marketing channels had risen from 56.4 kilos in 2005 to 297.8 kilos in 2008.
The Minister pointed to a significant increase in international interest in Mozambique's hydrocarbon potential. There were four exploration contracts in 2004, but now there are 14. No oil has yet been found, but increased reserves of natural gas have been identified.
The major gas project is at Temane in the southern province of Inhambane, 70 per cent of which is owned by the South African petro-chemical giant Sasol. Expansion of the production at Temane has recently been agreed, so that, as from 2010, it will rise from the current figure of 120 million gigajoules to 183 million gigajoules a year.
To date, Bias added, 348.8 million gigajoules of gas have been produced, and of this 334.4 million gigajoules has been exported by gas pipeline to South Africa. Inside Mozambique, the gas has been used to generate electricity for the northern districts of Inhambane, and has replaced fuel oil in the Mozal aluminium smelter and in the Matola cement factory.
Bias said that to date the state has earned 39.5 million dollars in royalties and tax revenue from the Temane gas.
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