How Rich Is Mozambique?

Mozambique is bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the
northwest, Zimbabwe to the west, and Swaziland and South Africa to the southwest. Maputo is the capital and largest city of Mozambique. The population of Mozambique is 30,066,648 as of 2020, and the GDP (PP) as of 2019 is estimated to be at $41.473 billion and a Per Capita of $1,331. The country’s GDP nominal as of 2019 is estimated to be at $15.372 billion and a Per Capita of $493

Mozambique became independent in 1975 and the country was devastated by war, also enduring almost 500 years of Portuguese rule and lootings.

The country was devastated by the civil war in 1977 and ended in 1992. Recent state-sponsored terrorism and Western influence in the ongoing unrest have seen the country in a terrible state which is hindering the growth of the country.

A country with so much potential and natural resources that could have been used to make Mozambique a first-world country has seen numerous attacks by Western-supported and sponsored Islamic terrorism. Billions of dollars are in offshores accounts by politicians which are puppets of the West, billions of dollars have gone into Portugal for the past years, which has left the people of Mozambique in poverty and a state of despair.

So the question is, how rich is Mozambique? The African Dream will take you through Mozambique’s natural wealth and deals with foreign powers.

Natural gas

According to the Oil & Gas Journal, Mozambique holds 100 trillion cubic feet (Tcf) of proved natural gas reserves and is the third-largest holder of proved natural gas reserves in Africa after Nigeria and Algeria.


Mozambique produced 212 billion cubic feet (Bcf) and exported 148 Bcf of natural gas in 2018. South Africa received 81% of Mozambique’s natural gas exports via the 535-mile Sasol Petroleum International Gas Pipeline.


The Rovuma Basin is a coastal basin situated near the border of Mozambique and Tanzania. The basin extends approximately 31,000 square miles.

Most of Mozambique’s recent natural gas exploration has occurred in Area 1 and Area 4 of the Rovuma Basin. U.S.-based Anadarko Petroleum, which was acquired by Occidental Petroleum, led exploration activities in Area 1 before France-based Total S.A secured Anadarko’s share (26.5%) of the LNG project in September 2019. U.S.-based ExxonMobil, Japan-based Mitsui, and South-Africa based Sasol also operate in the Rovuma Basin.

Area 1 of the Rovuma Basin is 25 miles offshore and covers 4,063 square miles. Area 1’s recoverable natural gas resources are estimated to be 75 Tcf, and discoveries in the Prosperidade and Golfinho-Atum complexes of Area 1 include Atum, Barquentine, Camarao, Golfinho, Lagosta, Orca, and Windjammer.

An onshore LNG facility with the potential capacity of 6.6 billion cubic feet natural gas per day (Bcf/d) will be built in Cabo Delgado to process natural gas produced in the region.

A $15.8 billion final investment decision (FID) was secured to finance the Rovuma LNG project from a consortium of export credit agencies and 20 commercial banks in 2019.

The United States Export-Import (EXIM) bank was the largest lender in the group, providing a $4.7 billion loan for the project. The FID was to be implemented this year, but it has been put on hold until 2021 because of the effect the novel coronavirus (COVID-19) mitigation efforts have had on oil prices.

On July 16, 2020, Japan’s Nippon Export and Investment Insurance (NEXI) announced plans to provide loan insurance for the Rovuma LNG offshore. The $2 billion, 18-year instrument will cover political and credit risks for the Area 1 block.

Area 4 of the Rovuma Basin is 31 miles offshore and spans 5,405 square miles. Area 4’s recoverable natural gas resources are estimated to be 85 Tcf. Carol field, located in Area 4, is being developed by Italy-based Eni. Eni is also constructing an ultra-deepwater floating liquefied natural gas (FLNG) facility to process the natural gas produced in Carol field. The facility could process up to 447 million cubic feet of natural gas per day (MMcf/d).

Mozambique’s advances in the LNG industry have been hampered by repeated militant attacks in Cabo Delgado. Since March 2020, militants have twice targeted Mocimboa da Praia, a port town not far from Total’s LNG project.

Coal

Coal production growth in Mozambique had slowed because of infrastructure bottlenecks and supply disruptions such as floods, rail collapses, and security risks. Recent infrastructure developments have begun to address these constraints, and the country is working to expand the industry. Most of the coal produced in Mozambique is coking coal, also known as metallurgic coal (mostly used to produce steel), and the remainder is thermal coal (used for power generation). Mozambique coal is primarily metallurgical and bituminous.

Mozambique holds 1,975 million short tons (MMst) of coal reserves. The Tete Province is home to Mozambique’s active coal mines and covers 13,127 square miles. Brazil-based Vale and India-based International Coal Ventures of India consortium (ICVL) are leading mine operators in the region.

In 2018, Mozambique produced 12.8 billion short tons of coal. Less than 1% (15 million short tons) of the coal produced is used for domestic consumption. Drawing on stockpiles, Mozambique exported 16.6 billion short tons in 2018. India received the highest share of Mozambique’s coal exports.

The Nacala Corridor rail and port project began operations in May 2017, transporting coal from Moatize to Nacala port via a 567-mile railway. The Nacala railway has a coal transport capacity of almost 20 million short tons per year, and the port provides an alternative export hub for Mozambique’s coal.

Construction of the Macuse deepwater port, located in Zambézia province, is expected to begin in 2021. A 326-mile railway line will connect the new port to the Moatize and Chitima mines. Concession of the port and railway construction was awarded to Thailand-based Italthai Thai Engineering. China Machinery Engineering Corporation and Portugal-based Mota Engil will execute the project, among other construction companies.

India-based Essar Ports signed a 30-year concession agreement in 2017 with the Mozambique government to develop a coal terminal with a capacity of 22 million short tons per year at Beira Port. The newly extended and rehabilitated 360-mile Sena railway line will transport coal from Moatize to Beira port. The new terminal—a public-private venture between Essar (70%) and the Mozambique government (30%)—is currently in development. Once completed, the new coal berth is slated to have a total capacity of 22 million short tons and reduce freight costs of Moatize coal exports.

Electricity

Total installed capacity in Mozambique is 2.8 gigawatts (GW). Hydropower accounts for 77% of total installed capacity. Thermal power from natural gas, diesel, and other renewables account for the remaining 643 megawatts (MW). Given its heavy reliance on hydropower, the country’s power market is particularly vulnerable to drought.

In 2017, total electricity generation in Mozambique was 17 billion kilowatthours (kWh), and electricity consumption was 14 billion kWh. One-third of Mozambique’s energy consumption is supplied by domestic hydroelectric generation.

Mozambique also consumes electricity generated from natural gas, diesel, and other renewables.
The country has made commitments to invest in transnational transmission lines. The 200 MW interconnector between Mozambique and Malawi will allow Mozambique to export electricity and link Malawi to the Southern Africa Power Pool. The Temane Transmission Project (TTP) will link a planned 400 MW natural gas-to-power plant in Temane to Maputo and South Africa.

As of 2018, only 31% of Mozambique’s population had access to electricity, according to the World Bank. In urban areas, 72% of Mozambique’s population has access to electricity, while only 8% of the rural population has access to electricity. Most of the population relies on traditional biomass and waste (typically wood, charcoal, manure, and crop residues) for household heating and cooking.
Mozambique has promoted solar photovoltaic (PV) solutions in rural areas and reported 700 schools and 800 other public buildings now have electricity from solar, according to the International Energy Administration (IEA).

In October 2018, the government of Mozambique approved the National Electrification Strategy (ENE). The initiative aspires to provide universal access to electricity and invites private operators into the electricity market. The Integrated Master Plan of Energy Infrastructures (PDIE), which defines the expansion guidelines of the areas of power generation, transmission and distribution, and diversification of power generation, was also approved in October 2018.

Abu Bakarr Jalloh

I am a Sierra Leonean freelance writer and storyteller. I was born in Sierra Leone, West Africa. I am passionate in telling inspiring African stories across the continent, and also tell the stories of Africans outside the continent. And also tell stories of African civilization. You can contact me on email: abubakarrj1997@gmail.com On WhatsApp: +23279777058

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