Mozambique Key Natural Resources
Mozambique's Key Natural Resources: Production, Exports, and Economic Significance
Mozambique, located on the southeastern coast of Africa, is endowed with abundant natural resources that are pivotal to its economic development and global trade. With a 2,700-km Indian Ocean coastline and vast mineral and energy reserves, the country is a significant player in Southern Africa's resource landscape. Key natural resources include natural gas, coal, aluminum, titanium, graphite, gold, precious stones, and hydropower, alongside marine and forest resources. These resources drive 57% of Mozambique's $8.27 billion exports (2023) and attract substantial foreign direct investment (FDI), with $2 billion annually ranking the country among Africa's top recipients. This article provides an overview of Mozambique's key natural resources, their production and export data, and their economic significance, highlighting opportunities and challenges.
Key Natural Resources and Production
Mozambique's natural resources span energy, minerals, and renewable assets, with significant production centered in provinces like Cabo Delgado, Tete, Nampula, and Zambezia.
1. Natural Gas
Overview: Mozambique holds 100 trillion cubic feet (tcf) of proven natural gas reserves, ranking 12th globally, primarily in the Rovuma Basin off Cabo Delgado's coast. The basin's Mamba South and Golfinho-Atum fields are among the largest in Sub-Saharan Africa.
Production:
Coral South FLNG (Area 4, Rovuma Basin): Operational since November 2022, producing 3.4 million tonnes per annum (MTPA) of liquefied natural gas (LNG).
Temane and Pande Fields (Inhambane): Operated by Sasol (South Africa), produced 5.6 billion m³ (182,500 terajoules) in 2020, primarily for export to South Africa via an 865-km pipeline.
Exports: In 2020, natural gas exports were valued at $1.1 billion, with Coral South supplying Europe and Temane/Pande feeding South Africa. Exports are expected to grow significantly with Coral Norte FLNG (3.55 MTPA, approved 2025) and potential restarts of Mozambique LNG (12.88 MTPA) and Rovuma LNG (18 MTPA) by 2030.
Significance: LNG projects have attracted $50 billion in FDI, with potential government revenues of $10 billion annually by 2030, though insurgency in Cabo Delgado delayed major onshore projects.
2. Coal
Overview: Mozambique has one of the world's largest coal deposits in the Moatize Basin, Tete province, with 25 million tons of proven reserves and 17 million tons of thermal coking coal.
Production: In 2020, coal production reached 8.1 million tonnes, primarily coking and steam coal, operated by Vale (Brazil) and Jindal Steel. Production increased from 2.6 million tonnes in 2012 to 10 million tonnes in 2017 (January–October).
Exports: Valued at $1.1 billion in 2021, coal is exported to India, China, and South Korea via Beira and Nacala ports, though logistical constraints (e.g., railway disruptions in 2013) limit output.
Significance: Coal is Mozambique's largest export commodity, but reliance on rail infrastructure and environmental concerns pose challenges.
3. Aluminum
Overview: Produced at the Mozal smelter near Maputo, one of the world's largest, using imported alumina from Australia. Operated by BHP Billiton, it has a capacity of 564,000 tonnes per year.
Production: In 2020, output was 564,000 tonnes, up from 555,000 tonnes in 2005, with plans for a 250,000-tonne expansion by 2009 (status unclear in 2025).
Exports: Valued at $1.27 billion in 2023 (15.4% of total exports), primarily to South Africa and the EU under the SADC-EU EPA. Aluminum is a top export, with 57% of export share in 2006.
Significance: Mozal contributes significantly to GDP and employment, though its reliance on imported raw materials limits local value addition.
4. Titanium (Ilmenite, Zircon, Rutile)
Overview: Mozambique is a top global producer of titanium, with deposits in Moma, Nampula (operated by Kenmare Resources, Ireland) and Zambézia's heavy mineral sands.
Production: In 2020, ilmenite production was 800,000 tonnes, zircon 56,000 tonnes, and rutile 21,000 tonnes. The Moma mine is a major global supplier.
Exports: Valued at $260 million in 2021 (part of metals/minerals), exported to the UK, China, and South Korea for aerospace and industrial uses.
Significance: Titanium exports bolster foreign exchange, but environmental concerns, as reported by Amnesty International regarding Haiyu Mining's operations in Nampula, raise sustainability issues.
5. Graphite
Overview: The Balama mine in Cabo Delgado, operated by Syrah Resources (Australia), is the world's largest graphite mine, with significant reserves for battery production.
Production: In 2021, output was 43,000 tonnes, with potential for expansion to 100,000 tonnes annually.
Exports: Valued at $1.09 billion in 2023, supplying 60% of China's graphite imports, critical for electric vehicle batteries.
Significance: Graphite positions Mozambique as a key player in the global clean energy transition, with exports driving FDI in Cabo Delgado.
6. Gold
Overview: Gold is mined artisanally and commercially in Manica and Sofala, with the Fair Bride deposit (Pan African Resources, UK) targeting 2,600 kg/year over 8–9 years.
Production: In 2020, 500 kg was mined, a significant increase from 0.2 tonnes in 2015 to 2.6 tonnes in 2016.
Exports: Valued at $409 million in 2022, primarily to the UAE, with illegal artisanal exports estimated at $50 million.
Significance: Gold supports small-scale mining communities but faces challenges from illegal trade and limited regulation.
7. Precious Stones (Rubies, Sapphires, Emeralds)
Overview: Mozambique is a major ruby producer, with the Montepuez mine in Cabo Delgado (operated by Gemfields, UK) hosting the world's largest ruby operation.
Production: Specific volumes are unreported, but ruby output is significant, with Montepuez leading global supply.
Exports: Valued at $49.2 million in 2022, exported to the UAE, UK, and Thailand, with a $27.8 million increase in 2022.
Significance: Precious stones enhance Mozambique's luxury goods market, though artisanal mining raises environmental and labor concerns.
8. Hydropower
Overview: The Cahora Bassa Dam on the Zambezi River, one of Africa's largest, has a capacity of 2,075 MW, with hydropower generating 80% of Mozambique's electricity. Total potential is 12,500 MW, with only 2,000 MW exploited.
Production: In 2022, 11 billion kWh was produced, with 70% exported to South Africa and Zimbabwe.
Exports: Valued at $200 million annually, a major revenue source for the SADC region.
Significance: Hydropower supports regional energy security, though only 51% of Mozambicans have electricity access, highlighting distribution challenges.
9. Marine Resources (Prawns, Fisheries)
Overview: Mozambique's coastline supports a rich marine ecosystem, with prawns as the largest single export commodity. Key fishing areas include Sofala and Nampula.
Production: Approximately 500,000 tonnes of seafood annually, including prawns, crab, and lobster.
Exports: Valued at $50 million (2023), exported to the EU (Spain, Portugal), China, and Japan.
Significance: Fisheries support coastal economies but face overexploitation risks, with 64% of the population food insecure.
10. Timber and Forestry
Overview: Forests in Zambézia and along the Beira railway supply hardwood, firewood, and charcoal, with potential for pulp and building materials.
Production: Unquantified but significant, with hardwood reserves largely untapped for export since the 1970s.
Exports: Valued at $181 million in 2023, primarily to China, though illegal logging accounts for a portion.
Significance: Timber supports domestic fuel needs but faces deforestation and regulatory challenges, with South African investors eyeing pulp production.
Export Data and Trade Dynamics
Total Exports (2023): $8.27 billion, with natural resources (metals, minerals, fossil fuels) comprising 57% ($4.76 billion).
Key Markets: India (21.1%), South Africa (18.3%), UK (11.9%), South Korea (6.1%), China (5.2%), UAE (7%).
Trade Agreements:
SADC Free Trade Area: Eliminates tariffs on 85% of intra-regional trade, boosting South African exports.
EU-SADC EPA (2016): Duty-free access to the EU for 97.8% of goods, supporting titanium and fisheries exports.
UK-SACU-Mozambique EPA (2019): Maintains tariff-free trade with the UK for coal and rubies.
AfCFTA (2023): Enhances intra-African trade, with a 2025 shipment to Kenya signaling potential for mineral exports.
China's Zero-Tariff Policy (2024): Covers 100% of Mozambican tariff lines, boosting graphite and timber exports.
Challenges: 2024 post-election unrest disrupted ports, costing $500 million in exports. Infrastructure gaps (only 19% of 30,562-km roads paved) and non-tariff barriers (e.g., China's phytosanitary standards) increase costs by 15–20%.
Economic Significance
GDP Contribution: The extractive sector accounts for 10% of GDP (2020), up from 1.2% in 2010, with hydropower and fisheries supporting services (44.9% of GDP).
FDI and Jobs: Resources attract $2 billion in FDI annually, creating 50,000 jobs since 2010, particularly in LNG and mining.
Regional Role: Mozambique's resources supply SADC markets, with Cahora Bassa powering South Africa and coal feeding regional industries.
Global Role: LNG and graphite exports position Mozambique as a key supplier for Asia's energy and clean tech sectors, with coal and titanium supporting global manufacturing.
Future Opportunities and Challenges
Opportunities:
LNG Expansion: Coral Norte FLNG (2027) and potential Mozambique/Rovuma LNG starts by 2030 could add $10 billion in revenues.
Critical Minerals: Graphite and lithium exports could grow to $2 billion by 2030, driven by clean energy demand.
Value Addition: Processing aluminum and titanium locally could boost GDP by 2%, supported by AfCFTA.
Challenges:
Security: Cabo Delgado's insurgency (2017–2023) delayed LNG projects, costing $500 million in trade.
Infrastructure: Aging railways and unpaved roads limit export efficiency.
Environmental Concerns: Illegal logging and mining (e.g., Haiyu Mining's Nampula operations) harm ecosystems, drawing NGO criticism.
Governance: The 2016 "hidden debt" scandal ($2 billion) and corruption reduce investor trust.
Conclusion
Mozambique's natural resources—natural gas, coal, aluminum, titanium, graphite, gold, precious stones, hydropower, marine products, and timber—are central to its economy, driving 57% of $8.27 billion in exports and attracting $2 billion in FDI annually. Production, such as 8.1 million tonnes of coal, 564,000 tonnes of aluminum, and 43,000 tonnes of graphite, supports key markets like India, South Africa, and China. Trade agreements like AfCFTA and SADC FTA enhance market access, while LNG projects promise $10 billion in future revenues. Despite challenges—2024 unrest, infrastructure gaps, and environmental issues—Mozambique's resources position it as a vital regional trade hub and a growing global supplier, with potential to transform its economy if governance and stability improve.