FOIL PLANS

Mozambique 2016 | INDUSTRY | FOCUS: ALUMINUM

Mozambique is the second-largest producer of aluminum in Africa and the 14th in the world. Since 2000, it has been producing aluminum for export, and in 2015 Midal Cables opened a factory near Mozal; the country's largest aluminum smelter. This could be the start of a Mozambican aluminum value chain.

According to the US Geological Survey's Mineral Commodity Summaries of January 2015, Mozambique is ranked 14th among aluminum producing countries worldwide, and second in African continent, after South Africa. During the middle of the 19th Century, aluminum was considered a precious metal, more valuable than gold or silver. Napoleon reserved a prize set of aluminum cutlery for his most distinguished guests, while everyone else at banquets would have to eat with “regular" gold cutlery. In Mozambique, aluminum has played such an important role in the socioeconomic development of the country that it could be still considered the national precious metal.

The Mozal aluminum smelter, located just outside Maputo, was Mozambique's first post-war FDI megaproject, beginning in 1998 and officially opening in 2000. Mozal produces just below 570,000 tons per annum of primary aluminum. The production of Mozal alone constitutes around 7% of the country's GDP. Until now, its aluminum has been almost entirely destined for export, especially Europe. In 2015, however, a new project aimed at supplying the product to the local market may be the start of a new aluminum value chain in the country.

Midal Cables International is a Bahrain-based group that has recently finished a $70 million factory not far from the Mozal plant. Danie Murray, Asset President of Mozal, explained to TBY that the plant has signed an agreement under which it will supply 50,000 tons of aluminum to Midal. “Partnering with Midal will create additional opportunities for the service industry," Murray said. “There is the opportunity to setup manufacturing facilities downstream from Midal's operations to produce a variety of goods from the cable that Midal produces."

TBY also spoke to Orlando Marques, the General Manager of Midal Cables International Lda., who said Midal Cables produced 46,000 metric tons of aluminum rod in Mozambique in 2015. This number is close to their 50,000 tons target, an amount they hope to achieve in 2016. This production, however, is still primarily sold to the international market. In Africa, Midal is currently exporting to Kenya, Nigeria, Uganda, Tanzania, Zambia, Zimbabwe, and South Africa. It also sends products to France, Germany, Italy, Spain, Portugal, and Finland, and recently started to export to Santos, Brazil, and Houston, Texas.

As locals say, if Mozambique wants to take advantage of these foreign direct investments, part of the output should be kept inside the country and used to improve the aluminum value chain, generating wealth for Mozambicans. In terms of demand, Midal expects the local demand increase in 2016, as more industries are developing around the sector and on the way to creating an aluminum segment.

In terms of job generation, manufacturing developments are also key to the country, not only because there are more opportunities available, but also because it is the perfect way to spread knowhow and train the future workers. Midal currently has 120 employees and expects to employ another 80 to 90 in 2016.

Many day-to-day products are made with aluminum, including soda cans, ladders, nails, staples, pots, window frames, gates, and a number of vehicle parts. In fact, the Matchedje Motors plant rolled out its first Mozambican vehicle in September 2014, and Hyundai assembly's plant in Matola, not far from Mozal, has been operating since 2014. These industries and many others could take advantage of having such close access to raw material. If a well-developed value chain was created, aluminum in Mozambique may soon be considered as valuable as it was in the time of Napoleon.