Forward Movement

Mozambique is currently on the rise as a transport hub for the region; boasting three major ports at Maputo, Beira, and Nacala, five international airports including Maputo, Beira, and Nampula, and two main railway lines at Maputo and Sena, it is becoming a central node through which the region’s impressive natural resource wealth must pass to markets near and far. The national railways alone handle over 12 million tons of cargo each year. Mozambique’s location makes it a natural gateway to South Africa, Zimbabwe, Botswana, and Malawi, and this is increasing demand for development in its infrastructure. Mozambique moves people too; her international airports can accommodate 900,000 passengers per annum.

Mozambique possesses vast natural resources, including large deposits of coal, aluminum, titanium, and natural gas and is estimated to have the fourth largest gas reserves globally and nearly three billion tons of coal reserves. The major coal deposits are located at the Moatize-Minjova, Senangoe, and Mucanha-Vuzi sites in the Tete province. Needless to say, the development of the natural resources and infrastructure go hand in hand in fostering economic growth. However, overall transport speeds—speed means efficiency—need to improve in order to accommodate this growth; official estimates indicate that the effective speed of road transport in Southern Africa is between 6 and 12 km per hour. Rail transport times are even lower with an effective speed of 4 km per hour on some routes. According to the World Economic Forum, in 2014 Mozambique was ranked at 126 out of 160 countries surveyed for the quality of its overall infrastructure, 142 in terms of its road infrastructure; 88 in terms of railroad infrastructure; 107 in its port infrastructure; and 110 in its air transport infrastructure. But moves are well underway to tackle these issues and develop the country as a regional transport hub.

THE FRIENDLY SKIES

In 2014 the European Investment Bank (EIB) provided a $26 million loan to support Mozambique’s main airport in the capital Maputo, which will help it meet international civil aviation safety standards. Specific improvements will include a resurfacing of the airport’s runway and taxi areas, new landing lights, expanded water supply in case of emergency, and improved aircraft fuel supply infrastructure. This rehabilitation program follows completion of new international and domestic terminals at Maputo airport in the last three years. Investments in safety improvements at the airport are essential to ensure continued flights by international carriers and compliance with International Civil Aviation Organization standards. The upgrade has not only created jobs during the construction process, but is also also an investment in generating long-term economic benefits across Mozambique through improved tourism and global business links

ROAD WORKS AHEAD

Mozambique’s roads are improving annually, with many ambitious developments underway. The Maputo Development Corridor is a flagship project and this massive undertaking has had important effects, not least of all in signaling the social and economic stability of Mozambique following its nearly two decade long civil war and the appeal of carrying out major investments in the country. The project concerns the improvement of nearly 360km of single carriageway highway on the Great East Road connecting the region. It is also linked to the Nacala Corridor, a regional transport corridor linking Malawi and Zambia to the deep-water port of Nacala. The coal terminal at Nacala is vital for the region; its 1.5km long jetty approach leading to offshore berthing facilities, makes use of natural water depth and will be capable of exporting up to 100 million tons of coal a year when fully completed. The overall project is mainly under the governance of the Maputo Corridor Logistics Initiative, a non-profit organization consisting of infrastructure investors, service providers and stakeholders from Mozambique, South Africa, and Swaziland, who are focused on the promotion and development of the Maputo Development Corridor (MDC) as the region’s primary logistics transportation route. Barbara Mommen, CEO of MCLI, tells TBY that, “Roughly $350 million has been spent on the building and maintenance of the road, and for the remainder of the concession there are still upgrades, improvements, and maintenance being done, because it is a build-operate-transfer (BOT) agreement. It is anticipated that over the next sixteen years we will see a further $400 million investment in infrastructure.”

RIDE THE RAILS

Major investments in rail link improvements are underway as well. A 2018 target has been set by a mixed foreign and Mozambican consortium to commission a $4.5 billion coal export railway and port terminal project in central Mozambique. The government has chosen the Bangkok-based contractor Italian-Thai Development (ITD) to construct the 537km railway from major coal deposits in Moatize in the Tete province to port of Macuse on the coast. Authorities also plan to increase transport to between 40 million and 50 million tons by 2020. Rail operator Portos e Caminhos de Ferro de Moçambique also plans to invest $1 million in infrastructure and rolling stock to replace current road links to the port with new rail infrastructure.

PORTS OF CALL

Mozambique’s port projects are inextricably interlinked with all of the major road and rail projects throughout the country. The ports of Maputo, Beira, and Nacala are widely acknowledged as central to the development of the region. Investments are also being made to develop the northern ports of Pemba and Palma, where a major logistics base and liquid natural gas (LNG) production plants are planned that will use gas produced from offshore fields. More than $30 billion will be invested initially in Mozambique’s natural gas sector to build capacity to produce 20 million tons per year of LNG, with the first exports due to start in 2018, according to the national oil company. The new port in the city of Pemba will have a 300 meter dock capable of receiving ships with a maximum draught of 12 meters and a variety of other facilities on a 36-hectare plot. This has logistics players very excited indeed. Alexandre Franco, Managing Director of Transitex Moçambique, tells TBY that,“Our plan for 2015 is opening an office in Pemba because we already have some business and our own people there. We’d like to capitalize on the opportunities of the oil and gas industry, maybe as a support company to make customs and things easier. We offer a full service from door-to-door. In Mozambique, we operate in all the ports and airports—Nacala, Nampula, Beira, Pemba, Quelimane and Maputo.”

The major Nacala Railway Corridor & Port Infrastructure project is another of the central improvements underway in the region. Nacala Port, at a depth of 14 meters, is the deepest natural port in Southern Africa and the third deepest on the eastern coast of Africa. The port is Mozambique’s third busiest, after Maputo and Beira, which are the busiest and second busiest, respectively. Nacala Port is also the terminus of the Nacala Railway, which extends 931 kilometers west into landlocked Malawi, connecting to Malawi’s Central East African Railway. The Nacala project is currently undergoing an upgrade of the 682km existing rail line and the construction of the new 230km rail line and construction of a new coal terminal in the Port of Nacala, which will lead to the development of other terminals. By managing the existing infrastructure effectively, the project’s railway transport annual capacity is planned to increase gradually up to 22 million tons, and the port’s coal shipping capacity is designed for 18 million tons annually; moreover general commodities shipping capacity is set to expand to 4 million tons annually. The total construction cost is expected to be approximately $4.4 billion, and part of the cost will be met with project finance from public financial institutions overseas and Japanese banks. Japanese owned Mitsui will own a 15% equity interest in the project and Mitsui’s initial investment amount for investment and loans is $450 million for the mine and $313 million for the infrastructure.

Other major port projects are underway. Coal producers are looking at building a 20 million ton coal terminal at Chinde, north of Beira. The New Coal Terminal Beira (NCTB) is a joint venture between Essar Ports, who hold a 70% share of the port and the rail authority of Mozambique (Caminhos de Ferro de Moçambique). Essar Ports has plans to develop a major 10 million ton per annum capacity coal terminal at the Beira port. The initial capacity of 10 million tons per annum (MPTA) can also be increased by a further 10 MTPA in case of more cargo and transport links come online.

The port of Maputo is also being upgraded; plans to increase throughput at Maputo port will result in $3 billion in investment by 2020, according to the Maputo Port Development Corporation (MPDC). The MPDC is a partnership between the Mozambican Railway Company and the global player DP World. It holds the concession for the port until 2033, with an option of an additional ten years. The total area for the Maputo port is approximately 129 hectares with 3,000 meters of continuous wharves ranging in depth from 8-12 meters; there are also terminals for citrus, sugar, and other types of containers. As Mozambique moves past its recent history of civil war and into a more prosperous and secure future, its impressive investments in infrastructure projects are helping to assure that all of its natural and mineral wealth are available to the world, and that the world can feel confident investing in Mozambique.