Mozambique 21 Sept: Commodities on the rise as IMF flies in
Good afternoon. The price of coking coal, one of Mozambique’s main commodity exports, has gone through the roof in recent weeks, leading at least one of the miners in Tete to start rushing its project back into action. The global commodity price slump was one of the main factors that made Mozambique unable to keep up repayments on the EMATUM, ProIndicus and MAM loans, precipitating the country’s current financial crisis - so this reverse could help get the country back on an even keel.
SEE: Coal price rise could revive interest in Mozambique mines
There could be more commodity exports in the pipeline if Mozambique manages to join the Kimberley Process, that regulates the global trade in diamonds, later this year. A key piece of legislation was approved by the council of ministers yesterday - but the head of Mozambique’s state mining company EMEM told Zitamar there is still much work to be done.
SEE: Mozambique eyes Kimberley membership after passing new gem rules
One of the main aims of the Kimberley Process is to avoid the diamond trade funding armed conflict, as it has in countries such as Angola and Zimbabwe. There has long been a suspicion that precious stones have a role to play in Mozambique’s conflict, too - with mining concessions in Manica known to belong to senior Renamo personnel, for example.
The Joint Commission to find a peaceful solution to the current conflict is in session today but the signs look far from promising. Having failed to reach agreement on a temporary ceasefire, the negotiators have skipped to the next point on the agenda - integrating Renamo fighters into the state security services - which was supposed to have been resolved by the 1992 peace agreement but has been a running sore ever since.
SEE: Mozambique peace talks move on without ceasefire agreement
The IMF mission to evaluate progress on the economy lands in Maputo tomorrow, 22 September. It should be pleased to see signs of austerity taking place - such as the cancellation of 47 public works projects across the country, which the Ministry of Finance told Zitamar is just the first phase in cuts across the public sector.
SEE: Mozambique austerity axe falls on 47 public projects – with more to come
Some vital projects are still going ahead, however - particularly with the support of the World Bank. A tender was published this week for constructors to finish building a dam that will improve the water supply to Maputo and surrounds, thanks to a $70m World Bank loan.
SEE: Mozambique launches tender for $83m dam project
Have a great week.