031_G18_Spotlight_Mozambique

Global_18

Spotlight Mozambique Coal and gas discoveries prompt economic boom Lack of investment during the colonial era and a long civil war left Mozambique among the poorest countries in the world – just ten per cent of Mozambicans have electricity in their homes. But its large reserves of fossil fuels are helping to change that Neil Ford Mozambique is in the process of transforming itself from basket case to boom economy within the space of a couple of generations. It experienced little development during fi ve centuries of Portuguese rule and was devastated by a bloody civil war that ended as recently as 1992 and turned it into one of the world’s poorest countries. Two decades of sound political and economic governance put it on the road to recovery and now the discovery of huge coal and gas reserves offer the prospect of more prosperous days to come. The headline fi gure of seven per cent average annual economic growth since 1992 is impressive enough. However, this started from a very low base and annual GDP per capita still stood at just US$578.80 in 2012. Yet even more rapid growth is forecast for the next decade, which could see per capita annual GDP break through the $1,000 barrier within six to eight years. Most investment to date has been made in the far south of the country, in and around Maputo and its industrial offshoot, Matola. However, the location of the new natural resource discoveries could help to spread development to the northern half of the country. The government puts national gas reserves at a massive 100 trillion cubic feet, most of it located in the far north, in the Rovuma Basin on the border with Tanzania. The main two development consortia, which are led by US fi rm Anadarko and Eni of Italy, have been persuaded by the government to develop a combined onshore liquefi ed natural gas (LNG) plant. LNG is the obvious option to develop the reserves – there is no large convenient outlet for the gas locally but the world’s biggest LNG markets are located on the opposite side of the Indian Ocean in East Asia. Gas will be piped to the plant to be processed into a liquid, so that it can be loaded on to LNG carriers for export. The plant will initially be developed with four liquefaction trains – or production units – giving combined production capacity of 20 million tonnes a year. As a rule of thumb, it e government puts national gas reserves at a massive 100 trillion cubic feet, most of it located in the far north costs about $1 billion to develop a million tonnes a year of production capacity, so it is clear that this will be one of the biggest single investments ever made on the African continent. Moreover, the project is being developed with expansion to 50 million tonnes a year in mind. Finally, the oil and gas industry in Mozambique is still relatively new, so there is plenty of scope for further discoveries to be made over the coming years. Mozambique is the most important new producer to emerge on the global gas scene for many years, but its arrival as an international coal supplier is equally impressive. Rio Tinto and Brazilian fi rm Vale are both developing massive coal projects in Tete Province in the north west of Mozambique that could collectively yield up to 50 million tonnes of coal a year. More than 100 other coal exploration licences have been granted in the same area, some of which have already yielded commercial coal reserves. Again, almost all production is to be exported overseas. The main obstacle to the development of the country’s coal industry is the lack of transport capacity required to move the coal from Tete eastwards to Indian Ocean Tanzania Malawi Mozambique DRC Zambia Zimbabwe South Africa • Maputo Key data  Population: 25,203,000 (2012)  Ethnicity: Ethnic groups include Makua-Lomwe in the north, Makonde in the far north, Thonga in the southern lowlands, Chopi and Thonga in the Inhambane coastal province and Shona, mainly in the central Manica and Sofala provinces  Life expectancy: 50 years  Land area: 799,380 sq km  GDP: 6.8% pa 2008-12  GNI per capita: US$510  Primary school enrolment: 90% global second quar ter 2014 www.global -br ief ing.org l 31 


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