Thursday, May 5, 2016

The rebirth of Mozambique's natural treasure

Group of waterbuck in Gorongosa National ParkGorongosa's predicament was in many ways indicative of the state of Mozambique's tourist industry, which had once been a significant part of the country's economy.Despite more than 2,700 kilometres of coral-fringed coastline, abundant natural beauty, rich cultural heritage, and its proximity to South Africa, one of the world's top tourist destinations, Mozambique was making far less money from international visitors than neighbours such as Zimbabwe and Zambia.Years of armed conflict scared off holidaymakers, and vital infrastructure such as cross-country roads and train lines had been all-but destroyed.Labyrinthine visa processes and the relative paucity of tour operators certainly didn't help matters, but most importantly, investment in tourism was desperately low.Today, Vasco is the communications director of a newly restored Gorongosa, which is once again making a name for itself as a premier safari destination, while acting as a model for many of Mozambique's long-neglected attractions.The restoration project, which began in 1994 with the help of the African Development Bank, is spearheaded by 56-year-old Greg Carr, an ebullient tech entrepreneur-turned-philanthropist from Idaho Falls in the US who made his fortune at an early age, and was looking for a venture to which, as he puts it, he could devote the rest of his life.Mr Carr visited Mozambique in 2004, at the invitation of the country's ambassador to New York, at a time when the country was "the single poorest nation on earth," he says. Read here.

Wednesday, May 4, 2016

It's a lie! Says police

Resultado de imagem para porta voz prmThe Police of the Republic Mozambique (PRM) denied today news circulated from the last week, some media and social networks on the existence of a mass grave containing more than a hundred bodies in the area 76, administrative Canda post , Gorongosa district, central province of Tete.A said trench would have been found by a group of peasants near a gold mine illegal and abandonada. Falando in Maputo during a briefing on the main events of last week, the spokesman Command-general of the PRM, Inacio Dina, said a commission of inquiry set up to investigate the case found no evidence. The working committee that was created to move the supposed site (zone 76) found no evidence, did not find such a mass grave that made reference, can not find, talk to the alleged peasants who have shown local journalists , afirmou.Dina invited media outlets in possession of information on the alleged mass grave to cooperate with the authorities and indicate their sources to facilitate investigação.Essa is information of great interest to the police and we are interested in determining the veracity of this information, said the spokesman for then stressed that farmers were unable to identify the alleged comum.Dina ditch also refuted images conveyed through social networks that illustrate a common grave. The spokesman deplored the fact insisting that these images require a confirmation of its authenticity. However, they said that they could serve as the basis for an investigation. He appealed to the media to collaborate with the PRM in the search for truth on such news.
Renamo, the main opposition party in Mozambique, today defended an international investigation into the discovery of at least 15 bodies in Gorongosa, center of the country, noting that the country is at war and needs of foreign mediation. "We regret this atrocity and we that international organizations of human rights should be an investigation at the scene, to establish the facts, "he said, speaking to Lusa, the spokesman for the Mozambican National Resistance (Renamo), Antonio Muchanga.Para Muchanga, only one international research can bring light to the truth, claiming that national authorities are submissive to the government. "most of our human rights organizations are silent and only act by orders of the Government," the spokesman Renamo.António Muchanga said that Renamo has reported the alleged disappearance of his party members in the central provinces of the country, including in the province of Sofala, where is the Gorongosa district, stating that the country is at war. "for Renamo, if there are government forces practicing armed actions, we are in a war situation, "accused Muchanga.
The third Mozambican party in parliament, the Democratic Movement of Mozambique (MDM), requires the involvement of justice and the Parliament in clarifying the revelation of a mass grave in the center of the country. Simango, leader of the MDM, told Lusa that the report revealed on Thursday about the discovery by a group of peasants from a mass grave of more than one hundred bodies in Gorongosa, in Sofala province, is aligned with the information in the possession of his party and disappearance of people in the region, but that "the authorities will always deny" .The opposition leader advanced that will send a team to the site, despite the security constraints imposed by the current military conflict, mentioning that among registered disappearances the MDGs in the area of ​​political party members and citizens are also included troops from its political force for almost a month. "All this is happening in Gorongosa", said Simango also mayor of Beira, capital of Sofala province, demanding investigations not only parliament as well as the Attorney General's Office, "which has the means and protection to reach the site safely" .The area is described as difficult access and high risk, given the presence of the military in the context of the current crisis military forces opposing the Government and the Mozambican National Resistance (Renamo), the largest administrator oposição.O party Gorongosa bucked on Friday the report of a group of farmers who assured the Lusa have observed a mass grave with more than one hundred corpses in the area 76, Canda administrative post in the district of Gorongosa.Segundo Manuel Jamaca, a team from the district government was sent to the site but did not find nada.A Sofala police announced that it will launch an investigation to determine the veracity of the discovery . "There is a lot going on and a lot of people to die in terrible circumstances," said the leader of the MDM, whereas one of the challenges the country is "the great lack of truth and justice of autonomy on the ground" .One of the three ears peasants by Lusa reported that "the trench is about 120 bodies, some already in bones and others decaying" without had bullet marks, suspecting just been discharged by vehicles due to signs of maneuvers on site. "There visible military remains and some bodies are naked, "described one of camponeses.Apesar to be no evidence that links this trench with the current military crisis in Mozambique, another peasant who was at the scene recalled the wave of persecution and executions for reasons policies and that the region has been the scene of fighting between the military wing of Renamo and Simango governamentais.Para forces, the existence of mass graves in Mozambique "is not new", referring to the civil war period (until 1992) and he noted that, although in the past there similar cases, "the authorities have no interest" .The Human rights Commission of Mozambique (CDHM) told Lusa on Friday who wants to determine the veracity of the alleged discovery reports mass grave in advance that, if confirmed, is a case "very disturbing" and urging the prosecutor also investigar.A Renamo and government forces keep fighting in the center of the country since 2013, with particular emphasis on the Gorongosa region where it is assumed the opposition leader meet, Afonso Dhlakama.No context of this crisis, which has worsened in recent months, there are several records of military confrontation between the parties, but no information or images on the respective low. "There images because the dead are hidden so as not to lower information, "said Simango, arguing that it is a human rights issue, where" families have the right to dignified funeral "and are incompatible with mass graves.

Fitch downgrades Mozambique to ‘CCC’

Fitch Ratings has downgraded Mozambique’s Long-term foreign and local currency Issuer Default Ratings (IDRs) to ‘CCC’ from ‘B’.Fitch has also downgraded the Country Ceiling to ‘B-‘ from ‘B’ and the Short-term IDR to ‘C’ from ‘B’.
The downgrade of Mozambique’s IDRs reflects the following key rating drivers and their relative weights: HIGH Mozambique’s public debt profile has deteriorated sharply following the disclosure of additional state-guaranteed debt, which had previously been excluded from official statistics. The terms of the loans are yet to be fully disclosed, including the extent to which cross-default clauses could precipitate a credit event.However, it is certain that their commercial nature will lead to a worsening of the country’s debt-servicing schedule and sustainability, which until recently Fitch considered favourable given the large share of concessional lending.According to the IMF, this debt to opaque state-owned enterprises amounts to at least USD1bn, around 6.3% of GDP in 2013 (the year it was incurred).We have re-estimated our general government debt figures accordingly, with the ratio of GGGD/GDP now standing at 83.3% at end-2015. This compares with 73.3% stated in our most recent rating action commentary (21 March 2016) and 54.4% for the ‘B’ median. Fitch now estimates that 88% of total public debt is foreign currency denominated (versus 69.1% for the ‘B’ median), raising risks to debt sustainability.
Our expectations of a further weakening of the metical in 2016 are likely to push public debt/GDP to over 100% in 2016, the highest figure in 15 years and compared with only 37.8% in 2011.
The lack of transparency from the government in disclosing the loans highlights weaknesses in both governance standards and the policy framework and has also worsened relations with donors, who provide around 9% of GDP in grants and loans per year. In this context, the outcome of current negotiations with the IMF, which has put on hold its standby credit facility (SCF) programme agreed in December 2015, will be crucial to determine the macroeconomic impact of recent developments.Although a complete halt of IMF assistance is highly unlikely, the Fund is likely to demand much more stringent public finance management and fiscal targets to continue making disbursements under the SCF.Given the country’s very limited financing options, any delays in restoring trust with donors would risk increasing fiscal, external and exchange rate instability.
Recent figures from the Central Bank of Mozambique point to a worse than expected weakening of the country’s external position in 2015.The trade balance deteriorated sharply as exports continued to struggle while imports contracted by only 5%, highlighting the country’s limited import-substitution capacity.Foreign direct investment (FDI; traditionally the main source of funding for the current account deficit) fell by 24% in 2015, as large resource extraction projects reached completion.Uncertainty over the timeframe of liquid natural gas (LNG) projects and downside risk to FDI amidst the recent deterioration in macro-stability could increase pressure on Mozambique’s weak foreign exchange (FX) reserves position in 2016-17.Fitch now forecasts FX reserves coverage (in terms of current external payments) at only 2.3 months in 2016, the weakest level in two decades.Inflation has started to accelerate rapidly, reaching a five-year high of 13.6% in March. This reflects supply side constraints (adverse weather has affected food production) and the depreciation of the metical against the US dollar (13% since December 2015) and the South African rand (13.5%).Higher prices have forced the Mozambican Central Bank to lift its main interest rate by 525 basis points since September 2015.
Further monetary tightening is likely in the short term, hindering growth.
Any adverse developments from the current problems with creditors could put even more downward pressure on the metical, resulting in potentially higher inflation and a more challenging policy scenario.Mozambique’s CCC IDRs also reflects the following key rating drivers: Medium-term economic prospects remain positive and are a key rating strength.Although growth is expected to slow in 2016, in line with fiscal contraction and higher inflation, we expect it to remain close to 5%, above the ‘B’ median of 4.3%.GDP growth should accelerate from 2017 onwards, on the back of reduced macroeconomic instability and a recovery in exports. Key infrastructure projects, such as the Nakala railway and port terminals have been completed and could help lift coal exports (as well as FX reserves) significantly over the next two years, especially if commodity prices recover.However, important downside risks remain, including extended drought, further adverse policy developments and the cancellation of LNG projects.
Mozambique’s banking sector continued to enjoy a strong performance in 2015, despite mounting macroeconomic challenges.The system’s return on equity averaged 20%, while capital adequacy stood above 16%. There has been a deterioration in terms of delinquent loans, but at 4.3% at end-2015, NPLs are still moderate and well provisioned.Importantly, banks’ FX exposure is less pronounced than in other countries in the region, with FX lending and deposits comprising 22% and 35% of their respective portfolios at end-2015. Moreover, most credit in FX is directed to companies with access to US dollars, reflecting macro-prudential measures (ie. extra provisioning requirements) that de-incentivise such lending.The country has some of the weakest structural features of speculative grade sovereigns.Per capita income stood at USD550 in 2017, only 15% of the ‘B’ median and the lowest figure of all rated sovereigns.Human development indicators are also well below the ‘B’ median. As highlighted by recent events, institutional factors such as transparency and data quality are very weak and a major constraint on the rating.
The main factors that could lead to a downgrade are:
-Confirmation of an imminent or actual credit event including the non-payment of sovereign-guaranteed debt obligations or the announcement of a debt restructuring that we regard as a Distressed Debt Exchange. The following factors could lead to an upgrade:
– Evidence of effective resolution of potential default risks from the newly discovered debt.
– Normalisation of donor support relationships.
-Fiscal consolidation that leads to a decline in government debt/GDP.
-A recovery in commodity prices that reduces external pressures and helps restore foreign exchange reserve coverage.
-Increased confidence in the development of natural resource sectors leading to a stronger external position.
Fitch assumes Brent oil prices to average USD35/bl in 2016 and USD45/bl by 2017.

Despite an uptick in violence in northern regions of Mozambique, Fitch assumes that political stability will be maintained given that the ruling Frelimo party controls all government institutions.

Business of Mozambique says public debt will increase costs

The Confederation of Economic Associations of Mozambique (CTA), representing the country’s entrepreneurs, said yesterday that the increase in public debt will make financing more expensive, and called on the government to reveal the true magnitude of the problem.“There is no doubt that the implications for company activity are negative, because the country’s image is tarnished by these revelations. The cost to companies and to the national economy of financing will be higher,” CTA spokesperson Eduardo Sengo.
Resultado de imagem para Eduardo SengoThe revelation of secret debts contracted between 2013 and 2014 by the Mozambican government project the image of a barely serious country, and will make doing business more expensive, Sengo said.“The credibility of the country had already been affected by the restructuring of the Ematum debt and, with the discovery of new debts, the country’s situation with regard to funding will be even more serious,” the CTA spokesman added.Sengo pointed out that the IMF’s position regarding the macroeconomic situation in Mozambique is crucial to investor confidence, and that the ultimate responsibility for defining the magnitude and nature of the new debt lies with the government.“We have to know if the new debt will be converted into public debt or remain just with the state as guarantor, as well as the maturity date and interest rates of these debts,” Sengo said.On 19 April, the Financial Times reported that the government of Mozambique had approved another loan of more than US$500 million to another company.On the same day, the Mozambican prime minister met the director general of the IMF, Christine Lagarde, and, according to a statement from the financial institution, recognized the existence of more than one billion US dollars-worth of external debt of Mozambique that had not been reported.Many Mozambican organizations have since expressed their indignation about the impact of hidden loans in government debt, demanding explanations from the government and a criminal investigation.According to a confidential prospectus prepared by the Ministry of Finance of Mozambique and delivered last month to investors in bonds of the Mozambican Tuna company (Ematum), the volume of public debt of Mozambique increased from 42 percent of GDP in 2012 to 73.4 percent in 2015.Ematum was the first known case of a loan (US$850 million) guaranteed by the government without being registered in the state accounts. The amount has since entered the public debt of Mozambique and Ematum obligations were exchanged for Mozambican sovereign debt in March.When the first news about the hidden Ematum loans first broke, the Frelimo majority in parliament rejected a demand by the main opposition Mozambican National Resistance (Renamo) party to explain the circumstances in which the debts were incurred.

Open the use of Shire and Zambezi rivers by Malawi

Mozambican President Filipe Nyusi has left open the possibility of Malawi’s use of the Shire and Zambezi rivers in Mozambique for its international trade, saying that the matter needs further analysis.“We’ll see, under the Tripartite Memorandum of Mozambique, Malawi and Zambia, what can be done to forward the project,” Nyusi said at a press conference in Lilongwe at the end of a working to the neighbouring country.Concerning the building by Malawi of a river port in Nsange based on the cooperation of Mozambique on the navigation of the Shire river, Filipe Nyusi said the alternative could be its transformation into a dry port.The two countries have long disagreed about the use of the Shire and Zambezi rivers in central Mozambique, with the landlocked country proposing the two rivers as viable access to the Indian Ocean.Maputo cites environmental reasons for its reluctance to allow the Shire and Zambezi to be used by large draft ships, but many suspect Mozambique’s position is a way of protecting rail and road corridors in the centre of the country.Malawian President Peter Mutharika said his country advocated the exploitation of cheaper routes for international trade. “Inter-modal transport is also on our agenda,” he said.In addition to relying on Mozambique for their import and export routes, Malawi and Zambia also intend to increase the amount of power they buy from Mozambique, to make up for the energy deficit in their own capacity.

Expected to export natural gas by 2021

The first phase of the project for natural gas exploration in Area 1 in the Rovuma basin in northern Mozambique, should be completed by 2021, with an annual output of 12 million tons, said the President of Thai company PTTEP.
Resultado de imagem para Somporn VongvuthipornchaiSomporn Vongvuthipornchai, who is also the chief executive of Exploration and Production, told the Bangkok Times newspaper that of that total 3.6 million tons of natural gas will be delivered to Thailand by the parent company of the group, PTT, the national petrochemical conglomerate.In May 2012 PTTEP acquired a stake of 8.5 percent owned by Irish company Cove Energy for US$1.92 billion in a consortium in which US group Anadarko Petroleum is the operator.Somporn Vongvuthipornchai said that the US group is currently involved in negotiating gas purchase agreements on the gas to be extracted as well as setting up the project’s financial structure.The launch of tenders for engineering design, procurement of materials and equipment as well as construction will take place soon.The CEO of PTTEP said the Area 1 project area in the future would be an important source of natural gas for Thailand, when the country has to start importing 22 million tons of gas per year compared to 4 million tons at the moment.

Eni may benefit from tech savvy partner

Resultado de imagem para Massimo MondazziItalian oil major ENI could benefit from an additional partner in developing its giant Mozambique gas deposits, especially one with project-management skills in running such complex ventures, a senior company executive said on Friday.“This contract is so big I guess we could take advantage from (having) a strong additional partner, not only stronger from a financial point of view but also (with) a capability to run such a complicated project,” Eni Chief Financial Officer Massimo Mondazzi said in a conference call.Eni has been in talks to sell a stake in its Area 4 gas development off the coast of Mozambique, containing 85 trillion cubic feet of gas – one of the richest discoveries ever.Area 4, in which Eni holds a 50 percent operating stake, will feed a series of onshore liquefied natural gas (LNG) export plants, mainly supplying Asian markets.Mondazzi’s comment came in response to a question whether Eni would be willing to sell more than a 15-20 percent stake in its main Mamba project if it kept operatorship in the nearby Coral development.Reuters reported in March that ExxonMobil was in talks to buy a stake of varying potential sizes in Eni’s Area 4 development, including a full operating stake.Eni has been in talks with several buyers including China’s Huadian Corp, sources have said.Coral is a floating LNG export plant and all the supply has already been sold to British major BP.

Mozambique and Swaziland sign MoU on energy

The governments of Mozambique and Swaziland signed a memorandum of understanding in Maputo on Thursday, with a view to stepping up cooperation in the areas of mineral resources, energy and water resources.The memorandum was signed by the Mozambican Minister of Mineral Resources and Energy, Pedro Couto and by his Swazi counterpart, Jabulile Mashwama, following talks between delegations from the two countries headed by President Filipe Nyusi, and the Swazi monarch, King Mswati III, who is on a three day state visit to Mozambique.Mozambican Foreign Minister Oldemiro Baloi told reporters that, during the talks, the delegations analysed all the areas of cooperation between the two countries, particularly in transport.“Swaziland was informed of the road and rail transport situation, and the current stage of the Mozambican ports, particularly the Maputo port sugar terminal, bearing in mind that Swaziland is landlocked and needs these facilities for its exports and imports”, he said.Baloi stressed that there are a large number of transport projects in which Mozambique wishes to cooperate with Swaziland, and there are challenges concerning road fees and insurance.One of the points in the memorandum is that Mozambique will increase the amount of electricity that it sells to Swaziland. Baloi said this seeks to ensure Swazi access to diversified sources of energy, including hydropower, and energy generated from natural gas.On Friday, Mswati and his delegation are due to visit the gas fired power station operated by the company Gigawatt-Mozambique, at Ressano Garcia, on the border with South Africa. The Swazi delegation hopes to discuss the possibility of selling power from this station to Swaziland.Swazi Foreign Minister Mgwangwa Gamedze said that the meeting also discussed agriculture, food security, and the need to step up the fight against threats such as foot and mouth disease, and the fruit fly.As for health care, Gamedze noted that there is already an agreement between the two countries for the exchange of health professionals, and to send Swazi students to Mozambican medical faculties.


The contracting of large government-guaranteed loans by Mozambique’s previous government, headed by President Armando Guebuza, was “a crime against the country”, according to former security minister Sergio Vieira.He was referring to loans to the two state companies Proindicus and Mozambique Asset Management (MAM), contracted in 2013-2014 for 622 million and 535 million US dollars respectively, that had not been disclosed to either the Mozambican public or to the International Monetary Fund (IMF), and the existence of which was only revealed last month.The scandal of the undisclosed loans “has humiliated the country and the government, which had to go figuratively on its knees in Berlin, Brussels and Washington”. (He was referring to the visits last month by Prime Minister Carlos Agostinho do Rosario to the IMF and World Bank headquarters in Washington, and of President Filipe Nyusi to Germany and Belgium).The loan to Proindicus is said to be for security purposes – to purchase boats, aircraft and radar stations to protect oil and gas companies drilling in the Rovuma Basin, off the coast of the northern province of Cabo Delgado, and other shipping in the Mozambique Channel.
Resultado de imagem para sergio vieiraVieira believed it was wrong in principle to use companies to buy military equipment. Recalling his days in the 1980s, working in the defence and security ministries, he said “I used to be involved in these questions (of buying weaponry). And these matters were treated state to state, and not via this or that company. Never! That’s for arms traffickers, and not for a respectable state, which doesn’t get involved with a bank in Switzerland”. (Credit Suisse was one of the banks that handled the Proidicus loan).He recalled that the governments of the country’s first President, Samora Machel, had purchased all manner of military equipment, but only on a state to state basis.Vieira stressed that the Attorney-General’s Office should have no fear in investigating the Proindicus and MAM debts. He suspected that much of the money had found its way to accounts outside the country – but “with pressure from the World Bank, the IMF, and the European Union, and with the support of Interpol, it is easier to obtain information about these external accounts”.

Plans to raise US$275 million

The Irish company Kenmare Resources that operates a dredge mine in Moma district, on the coast of the northern Mozambican province of Nampula, announced today that it hopes to raise 275 million US dollars.As part of this equity fundraising, it has entered into a conditional agreement with King Ally Holdings under which it will receive a hundred million dollars for ownership of not more than 29.9 per cent of the enlarged company.The company also hopes to receive a hundred million dollars from the Omani sovereign wealth fund and a further 75 million dollars from new and existing shareholders.The company still has a long way to go before the plan can be put into operation. Kenmare’s statement conceded that “a significant number of uncertainties remain and there can be no certainty that the capital restructuring, including the investment by King Ally, will be completed”.The Moma mine extracts ilmenite, rutile and zircon from titanium-bearing heavy mineral sands. However, falling prices and a nineteen per cent drop in output last year has put the company in deep financial difficulty. Raising funds to pay its creditors has been slower than hoped and the company defaulted on its loans at the end of January.Shares in the company fell almost twenty one per cent on the London Stock Exchange following today’s announcement of the latest capital restructuring plan.Ilmenite (iron titanium oxide) and rutile (titanium dioxide) are used to make white pigments for paints, paper and plastic. Titanium can be extracted from these ores and used to manufacture metallic parts where light weight and high strength are needed. Zircon (zirconium silicate) is used for abrasive and insulating purposes.

Up for its first iron-ore mining project in Tete

Mozambique’s first Iron-ore mining project, in the Moatize and Chiúta districts of Mozambique’s Tete province, may begin as soon as 2019.The project will cost approximately EUR 666 million (US$750 million) and will be developed over an area of 20,000 ha, excavating an estimated 750 million tons of ore over approximately 25 years.Tete provincial director of mineral resources and energy Grácio Cune explains that “after 25 years, if it is proved that there is still ore to extract, activity will continue”.
Grácio Cune, provincial director of mineral resources and energy for Tete.
Iron-ore mining is seen as a possible substitute for coal, which is currently in decline due to the fall in coal prices in the international market.“The iron-ore project will also use coal and provide leverage for the coal industry giving some relief from the lack of markets being felt in the sector”, Cune said.Cune believes in the project and expects iron-ore mining to benefit the whole of southern Africa. “The emergence of an iron-ore project may also lead to the emergence of other industries able to consume the product that comes from iron processing. It can boost development and further reduce steel imports to the region.”

At least 800 direct jobs will be created
The project will create over 800 direct jobs in mining and processing in its operation phase, and Tete provincial government believes this number could increase to over 2,500 during the implementation phase.Initially, the iron-ore extraction project in Moatize and Chiúta will supply ore for Mozambique and Southern Africa Development Community countries. But there are also plans to improve the Sena and Moatize-Nacala railway lines, “If you want to export ore, these two lines [Sena and Moatize – Nacala] may be useful,” Cune notes.
Almost 200 to be ressettled
Iron samples that may be extracted in Moatize and Chíuta.More than 180 people will have to leave their homes if the project goes ahead,  35 families in Moatize district and 16 in Chiúta. The Tete provincial government says it is already discussing resettlement with the communities involved. “We have identified three possible resettlement areas which are currently the subject of study, evaluation and communities consultation,” Cune says.
The Association of Legal Support and Assistance to Communities (AAAJC) is one of the mediators in the public consultation process, and is already accusing the government of imposing choices on communities.José Tomás is the association’s legal counsel and believes that procedures are not being followed. “When someone – whether a police officer or a figure of authority – forces a person to sign a document under pressure, it is not good.”Tomas considers the resettlement process is already flawed. He says that the Tete government, in assessing compensation, counted only houses and no other buildings or improvements.“As a result, in terms of compensation, you can no longer speak about the rest. Therefore we conclude that this resettlement is flawed,” he says, condemning the provincial government’s lack of candour.

Gas projects are not exposed to Mozambican public debt

The recent increase of the amount of declared national debt will not jeopardize state involvement in the natural gas projects in the Rovuma basin, National Hydrocarbons Company (ENH) chairman Omar Mithá says.The National Hydrocarbons Company is still awaiting the response of banks to its request for loans to ensure the participation of the state in Rovuma projects.“These projects are being organized in what we call project finance. You look at the project from an economic viability point of view, consider if it has a market or not, if it is efficient in terms of costs. The financial model is what counts. Although there is a certain connection, from the point of view of the credit risk rating, we must take note that this is a funding model organized in a way that it isolates the project from its partners’ assets,” Mithá said.

Zim’s cash crisis fuels gold

Zimbabwe could be losing thousands of dollars through the smuggling of gold into neighbouring Mozambique by small scale miners who have opted to sell their produce in the black market which has ready cash.This follows the current cash crisis which has seen local banking institutions limiting cash withdrawal by depositors.The cash crunch has forced small scale miners who are desperate for ready cash to snub Fidelity Printers and Refinery, a subsidiary of the Reserve Bank of Zimbabwe (RBZ).Miners said despite assurances from the central bank they would get their dues, most banks have reduced withdrawal limits as they try to grapple with the situation.The crisis which initially hit smaller banks but has spread to bigger financial institutions, has been blamed on increasing demand for cash as well as reluctance by Zimbabweans to use plastic money.Speaking at a stakeholders meeting which was convened by Manicaland Miners Association (MMA) recently, small scale miners voiced their concerns over cash shortages at the Fidelity Refinery.They said they were being forced to sell their gold through the black market, mainly Mozambique to raise money to pay their suppliers.“It does not make sense that I sell gold worth $10,000 to RBZ and I cannot access that money. It’s better to channel another portion to the black market so that I can get hard cash to cover other operational costs at the mine,” said one miner who said he was hard-pressed for cash as he had wages to pay to his workers.
Another miner from Penhalonga said government has to address the issue of cash shortages as this has impacted negatively on production.“The black market buyers are coming here with cash and we are forced by the situation to clandestinely remove some gold and sell to them. Government must address this crisis as soon as possible,” said the miner.Ministry of Mines Provincial Mining Director for Manicaland, Christopher Dube, said the matter was being addressed so that miners could access their cash on time.He told the miners that it was illegal to sell gold to the black market.“We know it’s a challenge and something must be done to address the matter so that you can pay your suppliers,” said Dube.MAA chairman, Lovemore Kasha, also confirmed that their members were facing challenges and urged the RBZ to address the situation.Imports, which have skyrocketed against the backdrop of shrinking exports, are also to blame for the cash crisis.The central bank recently injected heavily US$270 million since the beginning of the year, but this has not been enough to satisfy the high demand for money in the country.