Mozambique took a major knock when violence erupted earlier this year in Cabo Delgado, but the country is not allowing this to prevent it from attracting investment and developing new projects.“There is no doubt the insurgency in Cabo Delgado had an impact on the reputation of the country and one cannot get away from that, but there are also a lot of other things happening in Mozambique that bode well for the country’s future,” said African analyst Duncan Bonnett.While much of the development is happening in the south of the country, this does not mean that there is no focus on the north.“The ENI offshore project in the north was largely unaffected by the insurgency and has continued without much impact,” said Bonnett. “The f loating LNG vessel is being built in Korea and the project itself is situated 100km offshore. The first gas is expected to start f lowing next year, and this will be a major boost to Mozambique as the government will be able to start generating revenue from the project.”The Exxon Mobil Corp project in the north of the country was also not impacted significantly, even though the project owners delayed some work.“It is important to note that the project had not yet reached final investment decision (FID) when Covid broke out or the insurgency happened. It was still in its very early stages, and while there was some impact it was not as great as one would think. There is still a fair amount of work that has to happen on that project before it moves forward.”Bonnett said there were several other projects taking off in Mozambique that were cause for optimism. Sasol earlier this year reached FID on its Pande, Temane and Inhassoro project, representing Mozambique’s government strategy to monetise its natural gas resources through value-added projects.This project sets the stage for the country to become a small light oil and LPG producer by 2024 – but the likely construction of a gas-fired power plant in the same time frame provides significant upside risk to Mozambique’s gas consumption forecast, according to Fitch Solutions.Civil work and early construction work is already under way on the Sasol project.Another project to keep an eye on is the Gigajoule LNG project, according to Bonnett.This f loating LNG import terminal near the Port of Matola is close enough to South Africa to offer real opportunity to local players.“These projects are all drivable from South Africa, and they are all going ahead and not being impacted in any way by what is happening up north. This is good news for South African operators,” said Bonnett.Ongoing investment in the various ports in Mozambique is also a sign of the increase in volumes.“Beira has consistently been upping its exports of copper from Zambia and the DRC and is now also doing breakbulk shipments. Investments at the Port of Maputo continue and a new port at Macuse is under construction – all positive developments,” said Bonnett. “If one looks at what has happened in Mozambique then it is important to note it is not the first, and nor will it be the last country to develop a major industry in an unstable area or to be affected by serious risk factors. Companies involved in major project development are well aware of the risks and are able to navigate around these incidents – be it a war in Iraq or an insurgency in an African country.”Mozambique is not the first −and nor will it be the last country to develop a major industry in an unstable area or to be affected by serious risk factors.– Duncan Bonnett“
