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More to be done in Mozambique despite boom in mining industry

MAPUTO: Mozambican Prime Minister Alberto Vaquina has warned that the country's booming mining industry "will not solve all our problems", telling the people to look at it as "a great opportunity to accelerate our development and not as the sole path to development".

Addressing Mozambique's Parliament here on Wednesday, Vaquina said: "Since mineral resources are not renewable, we should immediately begin to prepare the structuring of a robust economy based on the integrated development of various sectors of activity."
He said among the areas in which Mozambique has great potential are agriculture, livestock, forestry industries, fisheries, transport and tourism, "which should merit our attention to ensure balanced and sustainable development”.

The Prime Minister was responding to requests from parliamentary groups of both the ruling Frelimo Party and main opposition party Renamo for information on the management of the country’s natural resources.
Vaquina said that the government was working to ensure that Mozambican companies also enjoyed benefits from the enormous coal mines being opened by multinational companies such as Vale and Rio Tinto in the western province of Tete.

It was seeking to create consistent and advantageous business linkages for Mozambican small and medium enterprises (SMEs), said Vaquina, who pointed out that international mining giants Vale and Rio Tinto had both set up business centres to assist SMEs in making the best use of existing opportunities.

However, he said that the tenders for supplying goods and services for the mining companies were often on such a vast scale that it was difficult for a small Mozambican enterprises, operating on their own, to respond adequately within the deadline.

Vaquina urged small Mozambican companies to work together to be stronger and more competitive, and thus able to benefit from more business opportunities.

He warned that there was a lengthy time gap between the discovery of mineral resources or hydrocarbons and the start of extraction, and a further gap before the companies concerned make any profit.

"Thus the idea of immediate redistribution of wealth, which is often associated with the extractive industry, is deceptive," he said.
Meanwhile, Minister of Mineral Resources Esperanca Bias told Parliament that taxes paid by mining companies had risen from 365.2 million meticais (about US$12.6 million) in 2009 to 1.14 billion meticais in 2010 and 1.58 billion meticais in 2011.

Responding to a request from the main opposition party, the former rebel movement Renamo for information on what benefits the exploitation of natural resources was bringing to Mozambique, Bias said that in addition to taxes the mining companies have provided a large number of jobs.

She said the extractive industry employed more than 15,000 workers in Tete province. Of these, 10,718 are working in the coal mines of Moatize district and in Cabo Delgado province, the mining industry employs 2,618 people, in Nampula 1,110, in Zambezia 649 and in Maputo province 504.

Bias said the mining industry would also provide raw materials for Mozambique’s industrial development.
Projects under consideration include an iron and steel plant based on the iron ore (titanomagenetite) discovered in Tete, and using the vast quantities of coking coal available in Tete.