Mozambique 27 May: Gas and gold
Good afternoon. As this week comes to an end, there is still no concrete news on whether or not Mozambique has technically defaulted on the government-guaranteed debt taken out by Mozambique Asset Management. What seems certain is that neither the company nor the government paid the $178 million due on Monday, 23 May – but negotiations are reportedly ongoing with the main lender, Russian bank VTB Capital, to find an amicable solution.
Other negotiations will re-start next Monday between representatives of the government and Renamo, in efforts to arrange a meeting between President Filipe Nyusi and leader of the opposition Afonso Dhlakama. There seems to have been a lull in attacks since the two negotiating teams met for the first time on Wednesday this week. That meeting was preceded by an intense few days of attacks on buses.
SEE: Mozambique bus attacks continue, as evidence emerges of soldiers on board
While political and economic uncertainty has stalled most investments, some activity is still going ahead. South Africa’s Sasol this week announced it has started drilling on its new oil and gas project at Inhassoro – and has been running consultations on plans to send its output by road to Beira, or to Maputo port – a route it started using in 2014 when Renamo attacks intensified on the EN1 highway.
SEE: Sasol drills first well, studies alternative tanker routes due to Mozambique conflict
Sasol has come in for criticism in Mozambique for generating very little revenue for the state. Sasol has argued that the favourable tax terms it secured are the reward for taking a risk on Mozambique when the country was fresh out of civil war and foreign investors were steering clear. It seems to be taking that bet again, as it prepares a major project expansion in the teeth of Mozambique’s biggest crisis since the Rome Accord of 1992.
The gas Sasol produces should fuel a major new gas-fired power plant nearby in northern Inhambane – which could be one of three big public-private partnerships in the gas and power sectors that Mozambique is planning. To that end, the African Development Bank is providing funding for outside consultants to provide technical support – with the tender set to launch in July.
SEE: Major Mozambique energy consultancy tender to launch in July
Over in the west of the country, Xtract Resources has found a buyer for its Manica gold mining project just two months after it wrapped up its purchase of the project from Auroch Minerals.
SEE: Xtract sells Mozambique gold mine at 40% profit
Just days after President Nyusi came back from China having signed declarations of brotherhood and co-operation – including in the technology and communications sectors – the ministry of labour suspended 21 Chinese workers at Chinese telecoms company ZTE.
SEE: Mozambique to expel 21 employees of Chinese snooping telco
Have a great weekend.