Mozambique coal: boom to bust to wait it out
By Ed Stoddard
MAPUTO, July 28 (Reuters) - Mozambique's coal rush is officially over and the government is now looking offshore to a gas bonanza, according to analysts at a coal conference this week in the capital Maputo.
Just a few years ago, billions of dollars poured into Mozambique, one of the world's poorest nations, in a twin scramble for inland coal and offshore gas.
The gas rush is intact, but the coal boom has come apart at the seams, hobbled by low prices, overblown expectations, and a rail and port network that remains woefully inadequate.
"At this stage Mozambique is not a coal story any more. It's very expensive, very uncompetitive and they need a lot of added capacity," said Thea Fourie, Africa economist at His, a financial and risk consultancy.
"It's really a liquefied natural gas (LNG) story now and I think the government is shifting its focus from coal to LNG," she told Reuters on the sidelines of a Mozambique coal conference organised by Informa.
In the coal region of northern Tete province, there has been a flurry of exploration permits issued and regular flights now connect this rural backwater to Johannesburg. But real action is limited.
According to Andy Lloyd, an independent geological consultant, as of November 2014, 124 exploration licences had been issued in Tete. There are 11 approved mining concessions - the midway point to getting the green light to start a project.