Disclaimer: The purpose of this service is to collate relevant information on regional integration and trade already in the public domain and to distribute it to a targeted audience. The views expressed in these articles do not necessarily reflect the views of TradeMark Southern Africa or its sponsors, clients and partners. TradeMark Southern Africa is also not responsible for any errors of fact contained in the articles.

Coal brings boom to Mozambique's Tete city

Tete:  Trucks queue day and night to cross the heavy bridge that spans the Zambezi river in northern Mozambique's Tete city, where coal is aplenty -- but moving it out is a logistical nightmare. Miners and drivers mull about patiently in peak hour traffic stretching back four kilometres (2.5 miles) as vehicles slowly advance on a one-way track, the direction of which changes every 30 minutes, to the other side of the river. At the western side of the crossing lies Mozambique's massive, relatively untapped coal reserves, estimated at 23 billion tonnes. On the other side is the road to Beira, a central port where the black stuff can be transported globally across the Indian Ocean.

China, which last August signed a five-year deal that could see 13 billion dollars (9.7 billion euros) invested in Mozambique over five years, is leading the demand. Energy-hungry India also wants in, with its firms spending hundreds of millions of dollars on exploratory work at mines in Mozambique.

Brazilian mining giant Vale, and Australia's Riversdale -- 24 percent owned by India's Tata Steel -- have invested 1.5 billion dollars (1.1 billion euros) to exploit Mozambique's coal from June next year.

But getting the coal to port is a headache. "If it's during the week you can stay almost two nights, or two and a half nights, waiting to cross the bridge," says Zimbabwean truck driver Tinotyei Nheweyembwa, 39, on his way to Malawi.

Some distance beyond the bridge giant construction vehicles turn earth and lug heavy equipment to a future coal mine amid the arid region's baobab trees, a sign of economic development in a previously dormant area.

Coal wealth is not a new discovery, but companies continue to wait for the southern African country to upgrade its infrastructure to bring the solid fuel to port. Mozambique is steadily getting to its feet nearly two decades after a civil war destroyed its roads and railways, crippling the economy.

One of the poorest countries in the world, it has opened its vast territory to nations and international companies seeking mineral resources. The rush to the coal fields completely surprised Tete, a sleeping hovel of a city nestled in a remote corner of the country bordering Zimbabwe, Zambia and Malawi.

Thousands of Mozambicans have flocked here in the past five years, drawn by work prospects at the mines and a tobacco factory as well as the city's new universities. Hundreds of expatriate mining specialists have booked out hotels and houses and the population is now thought to be 180,000, almost 30,000 more than the city's outdated records.

"Because it was so quick, Tete was not ready," says deputy-mayor Arnaldo Morais Charimba about the sudden population surge. "There's much pressure on infrastructure. There is a shortage of houses because of the rapid development."

Although the city does not have the money to build more houses, three new hotels will soon open. This year the cornerstone for a second bridge across the river was laid but there has been no work on the foundations. Around the city, roads and railways are being reconstructed and improved to bring coal and cargo to overseas markets.

Repaired for the first time after it was built 37 years ago, the existing 720-metre (2,400-foot) bridge was meant to reopen both lanes to traffic last December, but the date came and went with no opening.

The Sena railway line, which connects Tete's coal reserves to Beira was partly reopened for passengers last year. And a concession company is finishing rebuilding the 600-kilometre (380-mile) railway, which had been destroyed during the civil war. Later this year the train is expected to carry six million tonnes of coal from Vale and Riversdale to Beira.

With production expected to triple in a few years, however, companies are exploring other ways to get their cargo out of the country. Riversdale is "very serious" about barging coal down the Zambezi to the sea, says general mine manager Leon Fanoe.

While the mines will be ready, delays at Beira may however stall exports when production starts in six months. A fence surrounds the empty berth where no reconstruction work has started on the old terminal, while another terminal is only planned for later.

An atmosphere of massive development amid a fragile sense of progress that could yet fall apart is palpable. "If the port is not ready, there is no other way to get the cargo," says Fanoe. "You can stock up, but at some point it has to be ready. There is no plan B."

19 January 2011
Get the latest news:
Twitter Follow this News Feed on Twitter

Facebook Receive this News Feed in your inbox

RSS Subscribe to this News Feed on RSS


Early Closure of TMSA Programme: The Secretary of State of the UK’s Department for International Development (DFID) has decided to terminate its financial contribution to TradeMark Southern Africa (TMSA), as announced on 4 December 2013. As DFID is the sole financier of the TMSA programme of support to the COMESA-EAC-SADC Tripartite, TMSA will officially be closed from 17 March 2014 instead of 31 October 2014. For more information about the TMSA closure, and for a summary of some of the more notable successes of the Tripartite achieved with TMSA support, please click here