THE Mozambican economy received a major boost after the Development Bank of Southern Africa (DBSA) signed a loan agreement to provide R320 million towards the funding of the second phase of the Mozal Aluminium Smelter in Maputo.
In a statement released yesterday, DBSA chief executive and managing director Mandla Gantsho said the expansion of the Mozal 1 aluminium smelter would double the production of the smelter from 253 000 to 506 000 tons of aluminium per year.
He said the increased productivity would account for approximately two percent of world aluminium consumption.
Gantsho said the project would cost $1 billion (about R8 billion).
"The rationale for the DBSA becoming involved in this project is to provide continued support for economic development in the Southern African Development Community region, and to give effect to the DBSA's mandate to support infrastructure development in general," he said.
The DBSA was involved in the financing of the first phase of the project in 1998.
Other sponsors for the project are Billiton BHP, one of the world's largest aluminium producers, the Industrial Development Corporation and Mitsubishi Corporation.
Mozal 1 had a major impact on the Mozambican economy - more than 9 000 people were employed during its construction and 747 permanent jobs were created.
It is estimated that Mozal 1 will contribute $160 million (about R1,28 billion) to the country's gross domestic product (GDP) and increase its export revenue by more that 150 percent. Mozal 2 is expected to increase Mozambique's foreign exchange earnings by a further $100 million (about R800 million) and its GDP by about seven per cent.
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About 5 000 people are expected to be employed during the construction of Mozal 2 and about 1 500 are expected to be created in spin-offs from the project.
Gantsho said the successful implementation of Mozal 2 confirmed the commitment of the Mozambican government to creating an attractive environment for foreign investment.
The project's spin-offs would also benefit the South African economy, as substantial amount of goods and services would be exported from South Africa for the project.
South African exports for Mozal 1 are estimated at $700 million (about R5,6 billion) and a similar level of exports is predicted for Mozal 2.
