Mozambique - Mining and Mineral ResourcesMozambique - Mining
OverviewMozambique has commercially important deposits of coal (high quality coking coal and thermal coal), graphite, iron ore, titanium, apatite, marble, bentonite, bauxite, kaolin, copper, gold, rubies, and tantalum.
Mozambique holds some of the world’s largest untapped coal deposits. Vale of Brazil has made major investments in their coking coal mine. Their first coking coal shipments were in 2011. Vale, through its participation in the Northern Corridor Development (CDN) consortium, has refurbished the Nacala rail line, which runs through parts of Malawi to the deep water Port of Nacala. Opportunities for the provision of coal mining equipment and railway logistics and equipment exist. Given the expectation that mining costs in South Africa will rise considerably over the coming years, Mozambique could gain a regional competitive advantage.
Two large investment projects focused on the mining and processing of heavy sands deposits are moving forward. The Moma Heavy Sands (Kenmare Resources) and Corridor Sands (BHP Billiton) projects together will require more than USD1 billion in investment.
Mozambique’s mineral potential is largely untapped. Gold deposits in Niassa, Tete, and Manica Provinces have attracted domestic and international investor interest in recent years. Gold mining has been slow to develop as most of its activities are done by informal artisanal miners. However, increasing regulation of gold mining may lead to larger scale production, as the Government begins to require miners to formalize their legal status. Xtract Resources recently acquired a gold mining concession with estimated reserves of 2.97mnoz. Gold industry production is forecasted to grow 1.1% annually from 2016 to 2020.
Syrah Resources (Australia) made its first shipment of graphite from its Balama project in the second half of 2017 and formally inaugurated the project in April 2018. The Balama project has a production capacity of 350,000 tons per annum, which represents a 40% share of the worldwide graphite market. Syrah will export the majority of this production to the Chinese and U.S. markets. Mustang Resources Ltd. has announced the fastracking of its Caula Graphite and Vanadium Project in northern Mozambique. Valued at approximately USD44 million, this project is undergoing a definitive feasibility study and is slated to begin graphite production in mid-2019. Total graphite deposits are estimated at 700,000 tons from 5.4 metric tons of ore, with an associated vanadium content of the ore estimated at up to 1.02% Baobab Resources (Australia) is developing a pig iron project in Tete Province to supply iron and steel for regional infrastructure projects.
Gemfields (UK) owns a 75% stake in Montepuez Ruby Mining Limitada, which commenced operations in February 2012, and represents a $130 million investment in developing northern Mozambican ruby deposits in a concession area of 2600 square kilometers. Gemfields estimates that their existing concession contains an estimated 467,000 carats worth of rubies in both primary and secondary mineralizations. On July 16, 2018, Fura Gems Inc. (Canada) announces its acquisition of nine ruby assets in northern Mozambique from Mustang Resources Ltd. (Australia) and Regius Resources Group Ltd. (UK). On completion of the acquisition, Fura Gems will hold a ruby mining concession area of 1104 square kilometers in northern Mozambique. The acquisition is expected to be completed by November 2018 at which time Fura will hold effective interests in these projects of between 65% and 80% with the remainder held by local partners. Fura has announced its intention to invest upwards of USD 19 million in these projects over the next 3 years in a program of drilling, bulk sampling, and production mining.
Leading Sub-SectorsMining and refinery equipment, maintenance services and machinery, automation equipment and other efficiency improving services will be needed to improve profitability of mining projects.
OpportunitiesNew opportunities could be found in graphite mining and iron ore/steel projects. Smaller coal miners may also require equipment and services.
Mozambique Energy Trade Development and Promotion