Mozambique Critical Minerals
Key Critical Minerals in Mozambique: Unveiling Opportunities and Challenges
Mozambique is quickly emerging as a significant player in the global minerals market. With vast reserves of critical minerals, including graphite, tantalum, beryllium, and more, the country is paving the way for economic growth and development.
Graphite: A Leading Producer
Mozambique is proudly recognized as the world's fifth-largest producer of graphite, contributing an impressive 14% of global production with reserves exceeding 25 million tons. The Balama Mine, operated by Syrah Resources in Cabo Delgado, stands as the largest high-grade graphite mine globally, boasting a production capacity of 350,000 tons per year—representing a staggering 40% of the world's graphite market.
Graphite from Balama will play a crucial role in powering electric vehicle (EV) batteries for major companies like Lucid (starting in 2026) and Tesla, with production estimates reaching 117,416 tons in 2023 and projected to soar to 329,040 tons by 2024—a remarkable 180% increase.
Tantalum: A Hidden Gem
In addition to graphite, Mozambique holds a notable position in the tantalum market, contributing 6% to global production in 2006. The country is believed to house the world's largest reserves of tantalum's principal ore, tantalite, which is widely used in electronics and alloys. The Morrua and Muiane mines are key projects with potential production estimated at 230,000 kg/year of tantalum pentoxide (Ta₂O₅) if reopened.
Beryllium and Aluminium: Diverse Mineral Wealth
Mozambique accounted for 5% of global beryllium production in 2006, demonstrating its relevance in aerospace and electronics applications. Furthermore, as Africa's second-largest aluminium producer, following South Africa, Mozambique contributed 2% of the global output that year. The Mozal smelter remains a significant facility in this regard, producing 564,000 tons of aluminium.
Titanium and Heavy Mineral Sands: A Growing Sector
Mozambique's Zambézia and Nampula provinces unveil significant deposits of heavy mineral sands containing ilmenite, a primary source of titanium. The Moma mine, operated by Kenmare Resources, produces between 700,000 to 800,000 tons of ilmenite annually, along with zircon and rutile. The Corridor Sands project by BHP Billiton also targets heavy mineral sands near Chibuto in Gaza province, further contributing to the sector's growth.
Coal: An Energy Powerhouse
Though not always classified as a critical mineral, Mozambique's bituminous coal reserves in Tete province (Moatize) are substantial. With Vale's operations and the refurbished Nacala rail line supporting exports, production saw a remarkable 193% increase in 2006. Coal remains vital for regional steel production and energy generation.
Beyond the Major Players: Other Minerals
Mozambique also holds potential in other minerals. Artisanal mining of gold is prevalent, with formalization efforts in progress. Xtract Resources acquired a concession that holds 2.97 million ounces in reserves. Rubies, particularly from Gemfields' Montepuez project, boast impressive holdings of 467,000 carats, marked by a $130 million investment. Additionally, Baobab Resources is developing a pig iron project in Tete, while the Rovuma Basin contains some of Africa's largest natural gas reserves, enhancing Mozambique's position as an energy hub.
Economic and Strategic Importance
The impact of the mining sector on Mozambique's economy cannot be overstated. The sector's contribution to GDP grew from 1.2% in 2010 to 10% in 2020, with a remarkable 45% increase in sector employment over the same period. Furthermore, Mozambique's graphite is crucial for the global energy transition, particularly in EV battery production, positioning the country as a key supplier.
In 2021, exports of metals and minerals, including aluminium, titanium, and gold, were valued at $1.8 billion, alongside fossil fuels worth $1.1 billion. Coal exports reached 8 million tons in 2020, primarily targeted towards the Indian market. With rising mining costs in South Africa, Mozambique could gain a competitive edge in the region.
Challenges and Opportunities
While there are abundant opportunities within Mozambique's mineral sector, challenges persist. Low commodity prices since 2014 have hindered growth, especially in coal. Infrastructure deficits, high production costs, and foreign exchange issues remain significant barriers to development. Additionally, artisanal mining lacks regulation, and small-scale mines require better oversight, while security issues, such as attacks on the Muiane mine in 2015, pose risks.
Conversely, opportunities abound. Local processing of minerals, such as bauxite into aluminium, could increase value significantly—from $65/ton to $2,335/ton. Mozambique aims to forge EU partnerships for critical mineral processing to diversify its economy and create jobs. The African Continental Free Trade Area could enhance regional market integration, leading to increased investments. Furthermore, foreign direct investment and improved geodata are driving exploration efforts.
Government and Policy
The Mozambican government is committed to leveraging mining as a tool to reduce poverty, generate revenue, and enhance infrastructure. Stability since 1992 has attracted foreign investment, with economic reforms such as the 1996 tax system overhaul making the sector more appealing. The National Directorate of Mines and the Ministry of Mineral Resources & Energy play crucial roles in overseeing regulations.
Future Outlook
Looking ahead, graphite production is expected to expand by 13% by 2026, driven primarily by rising demand from the EV sector. According to projections, Sub-Saharan Africa, including Mozambique, could see critical mineral revenues increase regional GDP by 12% by 2050. Notably, global revenues from essential minerals such as copper, nickel, cobalt, and lithium are anticipated to reach an astounding $16 trillion over the next 25 years. Strategic partnerships, such as Syrah's U.S. loan for the Balama expansion, highlight Mozambique's growing significance in the minerals market.
In conclusion, Mozambique is positioned to capitalize on its rich mineral resources, unlocking potential for economic growth, job creation, and significant contributions to the global minerals landscape. With a proactive approach to addressing challenges and seizing opportunities, the future appears bright for this mineral-rich nation.