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Cablegate: March Economic Digest

VZCZCXRO3615
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #0442/01 1030559
ZNR UUUUU ZZH
R 130559Z APR 07
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 7139
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLMC/MILLENNIUM CHALLENGE CORP 0190
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 MAPUTO 000442

SIPDIS

SIPDIS

AF/S FOR CKARBER AND JMALONEY
JOHANNESBURG FSC FOR RDONOVAN
JOHANNESBURG TDA FOR DSHUSTER
USDOC FOR RTELCHIN
MCC FOR SGAULL
USAID FOR AFR/SA

E.O. 12958: N/A
TAGS: ECON EAID EMIN ENRG EINV ETRD MZ
SUBJECT: March Economic Digest

MAPUTO 00000442 001.2 OF 002

1. This is a brief summary of significant economic
developments in Mozambique during March 2007. This issue
has a strong mining theme. We provide it as a supplement
to our other reporting. The items discussed are:

-- CVRD to Begin Development of Moatize Coal Mine by June

-- Tantalum Mine Expands Operations

-- BHP Billiton Obtains Power for Chibuto Titanium Project

-- Canadian Company Finds Uranium in northern Mozambique

-- National Micro-Bank Opens; BCI Fomento to Expand

-- Petrobras and ENI to Build Bio-fuel plants

-- Japan to Reconstruct Roads, Finance Water Supply

CVRD to Begin Development of Moatize Coal Mine by June
--------------------------------------------- ----

2. The Minister of Mineral Resources, Esperanca Bias,
announced on March 28 that the giant Brazilian firm
Companhia Vale do Rio Doce (CVRD) will begin developing the
Moatize coal project by the end of June 2007. The mine,
located in Tete province in central Mozambique, is thought
to have reserves of more than 2.4 billion tons of coal.
Estimates are that CVRD will export 10-12 million tons per
year. According to Galib Chaim, General Director of CVRD-
Mozambique, the mine should start exporting coal by May
2010. Non-export quality coal will be used to fire a new
thermal power station; CVRD is currently looking for a
preferred partner to construct and run the thermal power
station, which will produce approximately 1500 MW of
energy.

Tantalum Mine Expands Operations
--------------------------------

3. Noventa, parent company of Highland African Mining,
announced that it expects to reach 300,000 pounds per annum
production at its tantalum mining operation at Marropino,
Zambezia province, by the second quarter of 2007. Highland
African Mining is developing a second mining project for
morganite at a nearby deposit in Morrua.

BHP Billiton Obtains Power for Chibuto Titanium Project
--------------------------------------------- ----------

4. This March the Chibuto "heavy sands" titanium mining
project moved one step further towards realization when BHP
Billiton received a power supply guarantee. A company
named Motraco will supply the majority of the projectQs
power needs, with MozambiqueQs electricity parastatal,
Electricidade de Mocambique (EdM), making up the
difference. Motraco is a consortium formed jointly by
Eskom (South Africa), EdM and the Swaziland energy company,
Swazi Electricity Board (SEB), and already supplies energy
to BHP BillitonQs huge Mozal aluminum smelter outside
Maputo. BHP Billiton owns the exploration rights for the
Chibuto deposit, and plans to set up an iron ore and
titanium processing plant on site. Current estimates are
that the project will use a minimum of 113 megawatts of
power.

Canadian Company Finds Uranium in northern Mozambique
--------------------------------------------- --------

5. The Canadian company Helio Resource Corporation (HRC)
announced on March 26 that new high resolution airborne
magnetic and radiometric data confirmed the presence of two
large uranium anomalies within HRCQs concession area in
northern Mozambique. The data was collected in a recent
World Bank-funded airborne geophysical survey of
Mozambique. The next step is further exploration,
including ground work to verify the cause of the anomalies.

National Micro-Bank Opens; BCI Fomento to Expand
--------------------------------------------- ---


MAPUTO 00000442 002 OF 002


6. On March 8 the self-described Qfirst national micro-
bankQ in Mozambique opened in Moamba, a small town 30 miles
from Maputo. The new bank, Microbanco Malanga, is owned by
a group of private Mozambican businessmen and financed by
the government's rural credit program. The government
program provided Microbanco Malanga with USD 625,000 in
capital.

7. In other banking news, Mozambique's second largest
private financial institution, BCI Fomento, announced on
March 12 that it will open 15 new branches throughout the
interior over the next two years. BCI Fomento currently
has 38 branches throughout the country. The bankQs current
capital is valued at over USD 12 million. BCI Fomento is
majority owned by the Portuguese state bank Caixa Geral de
Depositos and the private Portuguese Banco Portugues de
Investimento (BPI).

Petrobras and ENI to Build Bio-fuel plants
------------------------------------------

8. The Brazilian company Petrobras and the Italian firm ENI
signed a partnership agreement in March for the development
of bio-fuel production facilities in Mozambique. According
to Petrobras, Mozambique and Angola were chosen for the
first stage of this project because the two companies are
already active in both countries (they mine coal in both
nations). The companies intend to produce ethanol from
sugar cane and bio-diesel from other inputs. The amount of
investment and number of projects is not yet decided.

Japan to Reconstruct Roads, Finance Water Supply
--------------------------------------------- ---

9. Japan will provide USD 28 million to reconstruct the
road linking Montepuez in Cabo Delgado province with
Lichinga, capital of Niassa province. Japanese assistance
will pay to pave the road and to construct several concrete
bridges. In addition, the project calls for the
construction of draining structures, reopening gutters and
other work designed to protect against erosion.

10. On March 20 Japan signed a second agreement with the
Maputo Municipal Council for the construction of eleven
boreholes to supply water to city outskirts. The project,
which will benefit approximately 4,000 families in MaputoQs
Fifth District, will cost almost USD 90,000, and includes
community education on maintenance of the pumps. This
project brings water to families currently not reached by
the cityQs water system.

Dudley

© Scoop Media

 
 
 
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