Mozambique is one of the world’s important exporters of high-value ores, such as coal, graphite and rubies, which further adds to the country’s challenges in the global market for precious stones and metals.
While gains are being made in the national mining sector, perspectives are also multiplying about the future of this industry at a time when the planet is trying to harmonize energy challenges and mineral exploration.
The country’s and the world’s ambition to transition to clean energy requires the production in quantity of metals that will facilitate the desired transition. Graphite is one of the ores considered fundamental to achieving this objective and Mozambique is now one of the sources of this raw material.
More than enough reasons to know how we are and where we are going. The answer to this will come from a personality well understood in the matter and one of the important players in the mining sector in the country. His name is Geert Klok, President of the Chamber of Mines of Mozambique (CMM).
In the following lines, the reader will be able to find out, in detail, about the contribution and challenges of this industry and, not least, about the association that brings together Minas Gerais companies that operate in the national territory.
60 mining companies registered with the CMM
Founded in 2012, CMM has a total of 60 mining companies registered in its database and they are integral members of the association. These range from small-scale mining companies, cooperatives, associations and megaprojects.
According to Geert Klok, the Chamber of Mines of Mozambique represents companies in the sector, a factor that facilitates the approach of companies to the Government and vice versa, including with various institutions that work side by side in the sector.
All of these represent 88 percent of the production volume of the formal mining industry in the country. Klok understands that this percentage is a clear indicator that the mining sector in Mozambique is one of the important “arms” of the country’s economic development.
“The Chamber of Mines of Mozambique integrates, as we can see, the vast majority of the mining value chain. It establishes partnerships between various actors operating in the mining value chain inside and outside Mozambique”, explained Geert Klok.
The CMM leader believes that the partnership between national mining companies and international “players” is fundamental, in the initiative to transfer appropriate experiences for the transformation and development of the sector in the country.
Mining sector responsible for 30% of exports
The mining sector in the country and around the world has been severely affected by the impacts of the COVID-19 pandemic, which has been felt in the last two years.
With the outbreak of the virus, world trade modalities were limited to the restrictions imposed by the disease. However, Geert Klok notes that the sector is already recovering from the “illnesses” created by the pandemic.
The manager points out, for example, that the extractive industry continues to contribute 10 percent to the Gross Domestic Product. This figure results from a universe of exports of various minerals that is around 30 percent.
According to Klok, the highlight goes to graphite, an important raw material used for the production of batteries for electric cars, followed by rubies produced, for example, by Montepuez Ruby Mining (MRM) and lithium, which although in the initial phase of production, constitutes one of the main ores that compete for the balance of revenue.
“Each mineral has its own dynamics and the prices of some ores are very volatile on the international market. Graphite and coal are examples of this.”
Minas Gerais sector encourages development of local content
Mozambican economic policies are clear in accommodating the interests of national companies. One of the ways that the Government found to include national companies in the development of megaprojects was the creation of the Local Content Law, which despite not having been approved yet, several Mozambican companies also seek to be protagonists of large operations.
Klok notes that the mining sector has demonstrated significant demand for the services and products of local companies. According to him, local content presents enormous advantages for mining companies that are spread across Mozambican territory.
By way of example, the general director of GK Ancuabe Graphite Mine, S.A., a mining company that mines graphite in the district of Ancuabe, province of Cabo Delgado, stated that the acquisition of products and services by local companies would reduce costs that have been incurred when purchasing some imported raw materials.
For Geert Klok, the ideal would be for national companies to produce the material used by mining companies, especially in the vicinity of the areas where the mega-projects are located.
“Importing is complex, it takes longer to arrive, so the most practical thing is to have the product nearby. With this done, prices would also be more affordable”, pointed out the manager.
The success of the industrial parks model
According to data from the Ministry of Industry and Commerce (MIC), in the last five years, 63 investment projects were approved, particularly for the province of Cabo Delgado, with a total value of more than 402 million US dollars, with a potential to create 4,943 work stations.
The highlight goes to investments in the Services, Energy and Industry sectors. The ongoing projects namely Real Moz-afungi, valued at 44,958,277 dollars, Central Solar Metoro (51,921,000) and Montepuez Graphite Processing (35,000,000), are some examples to mention.
The idea of encouraging local content corroborates one of the goals of the Mozambican Executive, which aims to promote and expand industrialization in the country. For this reason, the Government established, in 2021, the National Program to Industrialize Mozambique (PRONAI: 2021-2035).
PRONAI, which stands out as an ambitious purpose of the Government, intends to improve the trade balance by 2030, through the substitution of imports from 0 to 15 percent, increase exports of industrial products by around 15 percent, guarantee growth sustained weight of the manufacturing industry and increase the contribution to the Gross Domestic Product (GDP) from 8.5% to 14% and the generation of more jobs in the manufacturing industry by more than 100 percent.
Aware of the challenges of industrialization in the country, the Chamber of Mines of Mozambique identifies itself as one of the catalysts for this objective. According to Klok, the Minas Gerais association is also encouraging gender initiatives aimed at establishing industrial parks with existing mining companies in the country.
The businessman talks about the importance, for example, of the implementation of the Topuito Industrial Park (PIT), opened last June, in the Moma district, Nampula province. Built under a partnership between MozParks and the mining company Kenmare, PIT functions as the anchor of this mining company that explores heavy sands in that part of the country.MozParks a>
“The idea is to take services through industrial parks close to mining companies. We have seen the success of the Beluluane Industrial Park and now Topuito. Our expectation is that more projects of this nature will be established successfully”, expressed Klok.
Responsibility for communities
It is essential that megaprojects, wherever they are installed, develop initiatives that aim to support local communities. In fact, the contracts that major projects sign with the Government provide for this to be the case.
Klok states that the sector he represents takes this aspect into consideration and points out that his association encourages companies to focus on social actions, to allow populations to benefit from the presence of large enterprises.
“There are companies that have, for example, agricultural projects, by providing inputs, they even help with techniques for improving agricultural production”, says Klok.
Furthermore, the businessman also points to the improvement in family income that companies have helped to generate, by hiring local workers. Geert Klok notes, however, that the association will continue to promote these types of initiatives for the benefit of pop
