The case of Mozal and Sasol

Mozambique has abundant quantities of natural resources, most of which are yet to be explored: natural gas, coal, mineral sands, hydropower and probably oil as well (Bucuane and Mulder, 2007b). However, as in many other African countries which have an abundance of natural wealth, the local population has not benefited in any significant way from the resources which have been extracted to power industrialisation elsewhere. Ordinary people in Southern Africa want to see this commodity boom translating into improved conditions of their life.

The main resources of the country are hydroelectric power, natural gas, coal, minerals (titanium, graffiti, etc.), timber, and fish. The main exports include prawns, cotton, cashew, sugar, tea, aluminium, cotton, citrus, timber and electricity (INE, 2008). The main mineral resources that involve major investments in Mozambique are: coal, natural gas, mineral (heavy) sands and probably, in the future, also oil. Other minerals include gold and semiprecious stones occurring in small quantities, which tend to be exploited by artisanal and illegal labour (in consequence not formally contributing to the country’s accounts).

The mining potential in the country is estimated at five million ton joules of natural gas in Pande/Temane fields, six billion tonnes of mineral coal in Moatize and Mucanha-Vuzi coal mines in Tete province, and 456 million tons of mineral sands, (299 million tons in Moma, Nampula province, and 157 million tons in Chibuto, Gaza Province). Mozambique’s heavy sands minerals potential represents one of the world’s largest deposits and has an estimated lifespan of over a hundred years (Andersson et al. 2007).

Mega-projects with South African capital participation are: Mozal 1 and 2 (which produces around 500 000 tons of aluminium per year, involving a capital investment of US$2.4 billion); the Temane-Secunda gas pipeline (Pande gas), US$1 billion; Limpopo Heavy Sands, (US$1.2 billion); Maputo Iron and Steel, (US$1.1 billion); Beira Petrochemical complex (US$1.7 billion); the Maputo Corridor  for infrastructures in Mozambique (US$ 1 billion); Motraco for electricity supply to Mozal (US$ 140 million).

These figures represent the total value of each investment. This does not mean that the total capital investments are South African; Direct Foreign Invetsment (DFI) in Mozambique has been through South African companies, although they are not the major shareholders). The South African companies involved in the minerals-energy investment are Billiton and IDC (major partners in Mozal); Sasol (Pande gas reserves, pipeline Temane-Secunda, and Beira Petrochemical complex); ESKOM (Motraco, Cahora Bassa, M’Panda Uncua); and Corridor Sands and Southern Mining (Heavy Sands), (Castel-Branco, 2003, 2002a; Andersson et al., 2007).

 

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