In July, Austmine along with the Queensland Government led a mission of 19 Australian mining equipment, technology and services (METS) companies to Mozambique.

The mission attended the Mozambique Coal Conference in Maputo on 5-6 July.  This Conference was attended by over 350 delegates and had 17 exhibitors, including the Australian Mining Technology Lounge.

Mission participants also had meetings with the Mining Ministry of Mozambique, the Investment Agency of Mozambique, the Coal Association of Mozambique as well as a meeting with procurement management of Vale Mozambique.

The delegation travelled north to Tete, some 700 km north of Maputo to visit the mine development and processing plant construction of Vale Mozambique.  This development will also include over 900km of rail from mine to port, a power plant and a loading port.  The overall investment in the project is $5 billion over the next 7-10 years.

While in Tete, the delegation met with the regional government of Tete province and other officials.

The group also visited the mining operations of Riversdale Mining, now owned by Rio Tinto.

With its relative political stability and reformist, pro-growth president, there is a renewed focus on Mozambique and its mining opportunities.  This combined with Rio Tinto’s recent purchase of Riversdale signals that growth prospects are good.

Mozambique is rich in mineral resources including coal, gold, iron ore, titanium and vanadium among other minerals and demand for these commodities has seen the expansion of mining ventures across the country. While diversification is taking place across the sector, bauxite mining remains the most mature sub-sector with aluminium comprising two-thirds of the country's exports in 2008 and allowing for a 300% increase in government export revenues in the period since 2001.
 
Business Monitor International (BMI) forecasts Mozambique's mining sector to experience a surge in growth as a series of new projects come online across the country. The industry is expected to expand by 27% in 2011 while in value terms it will grow by 40% to US$129 million.  The coal sub-sector will be one of the main drivers and in 2011 BMI forecasts the country's hard coal production to rise by 86%.

According to Robert Trzebski, Executive Director, Austmine and delegation leader, there are opportunities in all areas of mine expansion and construction Phase II around Vale’s Moatize project, but within the area of infrastructure (rail and port), power generation, training and education, and community relations management.

The key challenge for both Vale and Riversdale/Rio Tinto will be to build sufficient transport capacity to cope with the production of coal and ensure that rail and loading systems develop in line with output.

For Australian METS suppliers, the challenges are similar to those when entering a new market with underdeveloped infrastructure, no existent skilled labour, business cultural differences and a poorly understood bureaucracy.  Several Australian companies are already working in Mozambique, including Sedgman, Worley Parsons, Mitchell Drilling, Aurecon, Qmastor and Banlaw.

While opportunities exist in Mozambique with the two major coal mine developments being operated by world’s leading miners, there are other smaller scale – still significant coal mine developments in the country which could potentially grow to large scale operations.  Mozambique has also other minerals, iron ore, gold, bauxite which are yet to be further explored to become of significant scale.

For more information on delegation or opportunities in Mozambique, please call Robert Trzebski on (02) 9457-4660.