Mozambique 6 July: India comes to town
Good afternoon. Maputo is preparing for the arrival of Indian Prime Minister Narendra Modi tomorrow, when talks are expected to centre on the potential to export more food and fuel from Mozambique to India.
The Indian government yesterday announced it had signed an MoU with Mozambique to increase the amount of pulses, in particular pigeon peas, it imports from Mozambique. But the country is also interested in Mozambique’s gas and coal.
SEE: Indian government approves five-year plan to buy beans from Mozambique
Indian state-owned companies own 30% in the Anadarko-led offshore Area 1 gas project, which seems to be lagging behind Eni’s Area 4 in terms of progress towards FID. India is also heavily involved in coal mining in Tete, through private company Jindal and the consortium of state-owned coal and steel companies known as ICVL. Neither company is currently exporting to India, however, due to a combination of low coal prices and poor export infrastructure.
The second issue could be solved if a new rail line is built to Macuse where a new deep sea port is also planned. It’s hard to see how the economics of the project can work at current coal prices – but promoters appear to be moving ahead.
SEE: Public consultations this month on proposed Mozambique rail and port project
Work on the port of Nacala is also progressing thanks to Japanese concessional loans. It would be the likely point of departure for Mozambican lentils heading for India, as the vast majority are grown in Zambezia.
SEE: Tender out for next stage in Nacala port development
Meanwhile, a Japanese state-owned oil, gas and mining company is also exploring for coal deep in the north-western province of Niassa. If it does find a resource worth mining, it will face serious challenges getting it out of the country.
SEE: Japan explores for coal on Mozambique’s shores of Lake Malawi
And finally, ruby miner Gemfields in Montepuez has signed three financing deals worth a total of $45 million with two Mozambican banks.
SEE: Mozambique ruby miner inks loan deals with local banks
Have a great rest of the week.