Daily Maverick (Johannesburg)

31 July 2014

Mozambique: With Rio Tinto's Humiliating Exit, a Degree of Sanity Returns to Mining in Mozambique

analysis

Rio Tinto is one of the biggest companies on the planet. These guys don't make mistakes, surely, especially ones that cost in the region of US$3.7 billion. Except sometimes they do. SIMON ALLISON examines why the mining giant is exiting Mozambique with a massive hole in its balance sheet - and its tail between its legs.

Ah, 2011. The good old days for big mining. Riding the commodities boom for all it was worth, and more, the mining behemoths were rolling in profit and gorging themselves on new and ever more exotic concessions, splashing billions of all sorts of currencies around as they jostled for position and sought to keep up with China's unquenchable thirst for all things mineral.

It wasn't long ago, but it was a different age, a more innocent time - if such an adjective can ever be attached to natural resource extraction - when future profits were all but guaranteed and all that mattered was putting another corporate branded pin onto that world map of natural resources.

It was around then that excitement about Mozambique's potentially vast coal reserves peaked. In 2009, Brazil's Vale had sparked a mini coal rush with its acquisition of a concession ...

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