Mozambique Strategic+Minerals

= Recent Investment by The African Great Wall Mining Development Company Likely to Produce Significant Discoveries in Strategic Minerals. =

Executive Summary:
The African Great Wall Mining Development Company has recently filed for a contract to explore heavy mineral sands in the Chinde, Inhassunge and Nicoadala districts of Zambézia province. The initial project will require an investment of USD 130 million. If strategic minerals are found, then they also will require construction of a terminal at the port of Quelimane, improvement of local roads and other social projects. Mozambique is one of Africa's fastest growing countries involving foreign investment and will soon be one of the worlds leading producers in coal with recent discoveries of coking coal (used to produce steel).

Discussion:
Recently, Chinese investors have visited Mozambique to research investment opportunities involving energy, roads, ports, railways, iron, steel, and other investment opportunities. In 2010 the Wuhan Iron and Steel Group (WISCO) attempted to invest USD 800 million in the Zambeze Coal mine project, but was out bid by the Rio Tinto Group (UK and Australian). Even though WISCO lost this deal, plenty of opportunities exist within Mozambique. Investments opportunities in coking coal processing, steel, aluminum, iron ore, and cement are all potential opportunities for foreign direct investment (FDI).

Mineral production in Mozambique last year was around USD 470 million up from USD 170 the year before. Some of the major minerals include coal, gold, titanium, ilmenite, zircon, rutile, tantalite, marbles, and precious stones . One of the biggest coal mines in the world is the Moatize coal mine, which is owned by the Brazilian company Vale. China is the biggest buyer of coal ore from Vale. The Moatize coal mine has seen many investments involving infrastructure projects such as railways and ports in Nacala and the Sena Railway that is already in operation.

Analytic Confidence:
Analytic confidence for this assessment is medium. Source reliability ranges from medium to high. There is no conflict between sources. The analyst had low expertise, worked alone, and did not use structured analytic methods. The subject is moderately complex and the deadline was easy to meet.

Analyst:
Sean Dailey sdaile35@lakers.mercyhurst.edu