O ouro de Moçambique, no subsolo da zona de Tete. A seguir vem o gás do mar em frente a Cabo Delgado. Foto copiada do sítio da Mozambicoal, uma empresa com sede em Perth, Austrália, que iniciou operações mineiras em Tete há uns dois anos.


Texto assinado por Andrew England e publicado esta semana no jornal londrino The Financial Times:

Mozambique poised for coal boom

Race against time: drilling at a project near Tete, where coal mines
are being developed

All along the short drive from Tete’s tiny airport to the mushrooming
town centre lie numerous examples of the rapid development taking
place in one of Mozambique’s remote corners.

There are new bank branches, service stations and a supermarket, while
a large customs office and one of several new hotels are under
construction. The catalyst for change in the once sleepy town are
symbolised by a billboard advertising mining trucks, a sign offering
mine and plant equipment hire and a Rio Tinto training centre.

Tete is at the heart of Mozambique’s nascent coal rush, with the
region endowed with one of the world’s richest undeveloped coal
reserves. Prices of coking coal – used for steel production – may have
fallen back from the record high of two years ago but they remain well
above the level of the early 2000s. Coal is just the first chapter of
a resource story that also includes gas, with ENI of Italy and the
US’s Anadarko recently claiming huge discoveries off the nation’s
northern coast. It is estimated the gas projects could bring in $70bn
in investment and known coal projects another $10bn over the next
several years, the World Bank says. Billions of dollars more will be
spent on infrastructure in a country with a gross domestic product of
just $10bn.

The result is one of the world’s poorest countries has found itself at
the centre of unprecedented international investor attention –
illustrated by a bidding war to acquire Cove, a London-listed company
that holds an 8.5 per cent share in a gas field. These industries
offer the potential to transform radically the financial fortunes of a
state that depends on international donors for between 40 per cent and
45 per cent of its budget.

The question on the minds of Mozambicans and donors, however, is
whether the country can harness the benefits to lift the nation out of
poverty and in doing so avoid the resource curse that has blighted so
many before it. “It’s a race against time – is the big money that
corrupts going to come before stronger checks and balances?” says a
senior donor official.

So far, Brazil’s Vale is the only miner exporting coal – it started
last year – but the country could be producing 20m-50m tonnes per mine
annually within the next decade. Gas could start being pumped as early
as 2018, with the former Portuguese colony set to join the ranks of
liquefied natural gas exporters as a scramble for east African
hydrocarbons hots up.

Mozambique growth

Donors estimate that gas could generate revenue equal to two or three
times the current $3.6bn budget. Yet concerns remain that the
government has been caught out by the speed and scale of the foreign
interest and lacks the technical capacity to cope with the rush of

“They very much know their weaknesses and they are terrified . . . in
a good way,” the donor official says. “Terrified they will get it
wrong . . . worried expectations have run way ahead of what they can

Still, Armando Inroga, the trade minister, confidently talks of
Mozambicans being trained for new industries; local companies
providing services to multinationals; and investment zones popping up
around the country. “Mozambique is different,” he says. “Other
countries look to the energy sector, for us even now everybody wants
coal, everybody wants gas [but] we still maintain agriculture as the
main sector.”

Yet the nation’s experiences since the end of a 15-year civil war in
1992 highlight how hard eradicating poverty is.

Project limitations

Mozambique was the fastest growing non-oil economy in sub-Saharan
Africa over the past 15 years. GDP growth averaged 8 per cent between
1996 and 2008 – driven by reconstruction and development after the war
– and is forecast to be 7.5 per cent this year. But while there was
initial success in reducing poverty, progress stagnated with just over
half of Mozambicans still living below a poverty line of $0.50 a day.

Much will depend on the governing Frelimo party, which has ruled since
independence in 1975. It faces no credible political opposition and
Mozambicans describe a blurring of the lines between party, state and

Civil society groups, which argue the nation could be benefiting more
from its resources, have called for changes to the fiscal regimes
around extractive industries and greater transparency with contracts.
Partly in a response to that, the government, with support from the
International Monetary Fund and donors, is reviewing mining and
petroleum laws. It is also working to comply with the extractive
industries transparency initiative.

“There’s now a strong sentiment, even within the elite, that not
everybody is benefiting from the current development,” says Fernando
Lima, head of Mediacoop, an independent media company.

There are at least two groups within Frelimo, with one leaning
leftward and pushing for more equitable distribution of the resource
wealth, Mr. Lima and others say. “The second group wants a part of the
cake,” he says. “My sense is that group is growing.”

Civil society groups and the media in effect act as the opposition,
says Marcelo Mosse, executive director of the Centre for Public
Integrity, an anti-corruption organisation. But he adds: “We are not
strong enough.”

Tete provides a microcosm of the opportunities and potential pitfalls.

“It’s better now because it’s created jobs,” says Simba Maphaia, a
mining company driver. “There were plenty of guys just drinking, doing
nothing.” But he also gripes about outsiders benefiting from much of
the employment – partly because of Tete’s dearth of skills – and
worries that the construction of a second bridge over the Zambezi
river could force him from his home.

In January, hundreds of families protested outside Vale complaining
about their conditions after being resettled away from a mine. And the
level of poverty is conspicuous, with mud-brick houses and wooden huts
dotting the countryside.

Indeed, managing expectations will be crucial.

“The rhetoric is always there’s huge opportunity for Mozambique but
you look around at other places where there are resources being
exploited and you wonder why the development is not happening . . .
Can we do it differently?” says Aldo Salomão, at Centro Terra Viva, an
advocacy group. “We are rushing ourselves and what is happening in
Tete is an example of what should not be done.”

When Mozambique sought to rebuild after more than a decade of civil
war, it wanted a showcase project to tell the world it was open for
investment, writes Andrew England . The desired scheme came in the
form of an aluminium smelter, operated by BHP Billiton and
commissioned in December 2000 at a cost of $1bn. The Mozal investment
– much like the coal and gas projects – was initially hailed as a
welcome boost for a poor country. But a decade on, the International
Monetary Fund is among those to have raised questions about the
long-term growth benefits offered by such projects.

Mozal’s launch contributed close to 2 and 4 percentage points of gross
domestic product growth in 2000 and 2001 respectively, an IMF report,
released in December, suggests. But while such projects may boost the
economy during construction phases, their contribution then wanes, it
said. “Once a mega-project reaches its capacity, its output does not
grow any more,” the IMF says. “Thus, the ability of mega-projects to
be a continuous growth engine depends on the launch of new projects
and on the expansion of their capacity.”


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