Mining MX reported that Mozambique’s Maputo still bears the scars of its warring past tiny shell holes left in the extant walls where the country’s colonial past met with the good and evil of liberation.
But there’s a new bustle to the city; something has changed. It’s one reason why a two bedroom flat in downtown Maputo can cost you USD 7,000 per month and why banks are offering consumers off the street 15% interest on new cheque accounts. The roads still flood during the summer rains but commerce has come to Maputo, and Mozambique at large.
From the inland coal of the country’s Moatize basin in Tete province, to the prodigiously rich Rovuma offshore gasfields the world’s resource companies are throwing enormous amounts of capital at Mozambique. At the time of writing, Thai oil and gas company PTT Exploration & Production had bid USD 1.9 billion trumping an earlier offer by Royal Dutch Shell, for Cove Energy, a UK gas exploration firm that has an 8.5% position in Rovuma, reputed to contain 50 trillion cubic feet of gas.
In terms of portentousness, it was the kind of signal that Rio Tinto provided for Mozambique’s coking coal fields when it bid in USD 4 billion for Riversdale Mining’s Benga coalfield. To build a mine at Benga, forecast to become a 5.3 million tonne per year producer, some USD 270 million is required just for the first phase.
The outlay is fairly typical. Ncondezi Coal says its nearby Ncondezi mine will cost about USD 350 million to build while Brazilian resources group, Vale, is spending a further USD 6 billion on top of the USD 2.5 billion already spent to take production at its Moatize mine to 22 million tonne per annum from the current 11 million tonne per annum . The extra expense includes the cost of extending infrastructure.
Just as South Africa needs more infrastructure spending to expand, Mozambique needs the spend just to get going. Vale’s USD 6 billion expansion of Moatize is to rail the extra coal to Nakala, a port development in the north of Mozambique that the company has effectively bankrolled. It’s just one of the rail lines under consideration, including one from the coalfields to Beira, and another to Maputo involving Rio Tinto, Ncondezi Coal and a local Mozambican firm. And once at port, there are capacity issues that need the jumper leads applied.
JSE listed logistics company, Grindrod, is financing the expansion of the Matola coal terminal in Maputo to about 24 million tonne per annum from the current 6 million tonne per annum but there are at least four or 5 other terminals in embryonic form planned for the Mozambique peninsula. It now befalls the Mozambican government, which only several years ago was wrestling with ways to encourage investment, to clarify and prioritise what needs doing when and by whom. More importantly, who gets to use it.
Mr Esperança Bias Mozambique’s plain talking Minister of Mineral Resources wants an open system that is, infrastructural development should throw open the economy, not see it mewed up by dominant companies, albeit the investors. Asked at a Coaltrans conference in 2011 regarding use of its Nakala railway line, Marcelo Matos, GM of Vale’s coal sales and marketing, was elusive. There are conditions in place on how we proceed. Pressed on whether coal producers could make a capital contribution and therefore share the line, he was hesitant. The word ‘negotiations’ figured high in his response.
Mr Justin Lewis CEO and Chairman of Beacon Hill Resources was among the first to recognize the value of coal in the Moatize basin and named his mine after it: Minas de Moatize. The relatively modest 2.5 million tonne per annum operation, when it reaches full tilt, is in the meantime trucking annualized some 500 kilo toone per annum of coal to Beira, a process requiring 100 trucks. It’s not cost effective but until the Sena rail the long standing rail line between Tete province and Beira is properly rehabilitated and expanded, there’s little he can do.
Source - Mining MX
(www.coalguru.com)
