The Economics of Coal

“IRegardless, production of coking coal alone will not drive a significant resource-revenue boom, and Mozambique would benefit from mitigating the high expectations about its extractive industries.

The new government should consider an effective communication strategy to spread this message.”

Research for Chatham House

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“Mozambique’s coal rush is officially over... according to analysts at a coal conference this week in the capital Maputo… 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.”

Ed Stoddard, Reuters, July 2015

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“The Mozambican economy presents little structural transformation, relying mostly on megaprojects in the aluminium, extractive industries and the energy sectors. Its capital intensive nature does not generate enough jobs to provide sufficient opportunities for the fast growing young population.”

African Development Bank, African Economic Outlook 3 2014 – Mozambique

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INDEX

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2.

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The coal sector in Mozambique Transport Government revenues from coal Jobs Suppliers and indirect jobs Domestic electricity production Loss of land and income for those displaced Loss and pollution of water resources The resource curse, Dutch disease and crisis

9 19 25 33 35 37 43 45 47

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INTRODUCTION

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Despite much talk, the anticipated coal mining boom in Mozambique has never taken off. Just three mines are operating, probably exporting just over 4 million tonnes of coal in 2015 (compared to claims of 30 million tonnes of exports just a few years ago). Internally there have been difficulties in transporting coal from Tete province to the coast, and coal produced has been of a lower quality than expected. Externally, the price of coal has been falling over recent years and collapsed in 2015 as China’s construction boom ended, and major economies have begun to turn away from coal given its high local and global pollution costs.

Today, all the existing coal mines operating in Mozambique are running at a loss, and there can be little expectation of further development based on current global coal prices.

However, even if coal prices did recover, the costs of coal mining in Mozambique far outweigh the benefits.

In 2014, the Mozambique government received just 13% of revenue generated from coal mines, but it is likely that this percentage has fallen further with declines in coal price and profitability. Coal mining is likely to account for just 1% of the government’s total revenue, in 2015 between $44 million and $50 million. In contrast, we have identified more than $700 million of loans to the Mozambique government which were supposedly spent on transport infrastructure for the coal industry and technical advice on managing the coal industry. Even if these came with 0% interest rates, which they didn’t, it would take between 14 and 16 years at current revenue levels just to recoup this money. There is likely to be other public funding spent on infrastructure development for coal mines which we have not identified, or has not been made public.

Extractive industries by their nature employ few people.

Currently there are at most 3,000 Mozambicans employed directly by the coal mines,4 with mining making up just 0.6% of employment in Tete province. In contrast, 3,500 families (around 17,000 people) have lost their farmland through the development of coal mines so far, many of whom have not received land of similar quality in return. Mining has had a net destructive impact on livelihoods.

The IMF and other research has previously estimated that coal mines could eventually employ 7,000 Mozambicans

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permanently.5 However, these figures are based on production expanding to 31 million to 85 million tonnes per year, three to twelve times more than current production levels (though this is not going to happen based on current coal prices). If this did happen, it would means several tens of thousands losing their farmland, with it being likely that they would again receive much less fertile land as ‘compensation’.

Another claimed use for Mozambique coal is domestic electricity production. So far, the only strong interest in developing coal power plants in Mozambique is to provide electricity for the mines, with a small residual being sent to the grid for use elsewhere. The one coal power plant being built at the Moatize mine will supply at most 350 GWh of electricity to the grid a year, which is dwarfed by the 7,000 GWh of electricity given to the Mozal aluminium smelter at subsidised rates each year, again with little impact on the Mozambique economy.

Globally, geothermal, gas, onshore wind power and smallscale hydro are all cheaper sources of electricity than coal, and available in Mozambique. Solar power is declining rapidly in price and expected to become the cheapest source of electricity in many countries in the next decade. Most of these come with no local pollution when they are installed, and gas power is far less polluting than coal. In contrast, coal power plants are the most damaging form of generating electricity. Furthermore, wind, small-scale hydro and solar can all be provided at a small scale, and so actually get electricity to small rural communities, rather than electricity generation being solely for large companies and elites.

The EU estimates how much economic damage is caused by the pollution from coal plants. Applying these figures to Mozambique, if three 300MW conventional coal plants were operating, this would mean between €250 million and €720 million of damage a year. In the unlikely event that 8GW of coal plants were built in Mozambique, these figures would increase to €2.2 billion to €6.4 billion a year.

In reality, this scale of financial cost would not be created in Mozambique because, for example, those suffering illness in Mozambique are far less likely to receive the same financial ‘cost’ medical treatment as in Europe, or the land degradation will have a lower financial cost because agricultural production has a lower ‘value’ than in the EU.

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What the large figures do indicate is the scale of health and environmental damage such air pollution can create, and the actual impact on people’s lives would be greater in Mozambique in real terms (rather than financial) than in Europe because the same healthcare is not available, and because so many people are dependent on the land for their subsistence.

The coal mines themselves produce large amounts of pollution which has the economic cost of damaging land and subsistence livelihoods downstream. Acid mine drainage pollutes local water supplies, killing fish and making the water dangerous for human health and agricultural use. It has been estimated that 29% of the water in the Zambezi river basin in Mozambique comes from tributaries in the coal mining area, putting huge amounts of Mozambique’s land and water resources at risk.6, 7 A presentation on the Environmental Impact Assessment for the proposed Revuboe mine in 2011 found that there were already higher concentrations of heavy metals in the Revuboe river basin than stipulated as being allowed under Mozambique legislation.8 There is a constant run-off of toxic elements and compounds from mine waste, but the most damaging impact is if the tailings dams where waste is stored burst. In November 2015, a tailings dam at the Samarco iron ore mine in Brazil, jointly owned by BHP Billiton and Vale, burst. Thirteen people died and eleven are missing. The Brazilian government has estimated the cost of the dam burst as $5 billion. Heavy rains and floods in Tete are already a regular occurrence.

Climate change is expected to make heavy rains worse in Mozambique as warmer air can hold more water.9 This makes it harder to manage the waste from mines and makes toxic seepage from dams and dam bursts more likely.

The resource curse is a widely seen phenomenon where countries which are rich in natural resources have high levels of poverty and inequality and slow or non-existent rates of economic diversification. Many of the suggested reasons for why the resource curse exists have already been covered in this report concerning the Mozambique coal sector; low tax revenue and few jobs meaning relatively little revenue passes into the domestic economy, large loss of land and livelihoods, high government spending on infrastructure for

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extraction which brings few returns and the costs of local pollution, land and water degradation.

On top of these reasons why revenue from extracting resources does not pass into an economy, there are also reasons why extraction damages other parts of the economy. ‘Dutch disease’ is a situation where the inflow of foreign currency into an economy to pay for investment in extractive sectors, and as revenue from those sectors, pushes up the exchange rate of the domestic currency. This exchange rate appreciation makes it harder for domestic producers of goods to sell locally, because imports are cheaper, and harder for exporters to grow their businesses, because the high exchange rate means their goods are too expensive in foreign markets.

To some extent, the coal sector in Mozambique will have been limited from causing the Dutch disease because so little actual revenue from coal extraction has been transferred into Meticals and spent in the Mozambique economy. However, this will have happened to some extent, particularly during the development of the mines, when more money flowed into the Mozambique economy, but this was not sustained.

Possibly more problematic is that expectations created concerning coal extraction and other mega-projects in the extractive sectors has led to speculation on the Metical and Mozambique economy, causing the Metical to be valued more highly against the US dollar than would otherwise have been the case. Since the coal price has crashed, the Metical has fallen dramatically against the dollar, making the real value of debts owed in foreign currencies much bigger. Mozambique is now discussing a new lending and structural adjustment programme with the IMF, where IMF loans will be used to pay off previous lenders, but the large debt which has been created over the last ten years will remain with Mozambique.

These wild swings in exchange rates indicates another reason for the resource curse, the huge variability which comes with dependence on extractive industries and commodities.

Commodity prices are wildly volatile, therefore the more an economy is dependent on commodities, the more it will suffer from economic shocks.

Since the mid-2000s, commodity exporters have enjoyed a long period of high prices, based on China’s economic growth and thereby high demand for commodities. The

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period of high commodity prices has now come to an end, bringing with it a potential economic crisis for Mozambique.

UNCTAD reported in April 2015 that Mozambique was one of the most commodity dependent countries in the world, with commodities accounting for over 90% of merchandise exports.10 There can now be little expectation of much revenue or economic benefits from the coal mining industry, but these were largely a myth anyway. This presents an opportunity to focus on developing alternative industries instead which create jobs, reduce the need for imports, increase exports and diversify across a range of products that are not so vulnerable to wild swings in price.

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Mozambique EITI Compliant Mining Cadastre Portal – http://portals.flexicadastre.com/mozambique/en/

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1. THE COAL SECTOR IN MOZAMBIQUE It has been estimated that around 20 billion tonnes of coal reserves are in Mozambique, though of these 850 million tonnes 11, 12 of recoverable reserves have been found so far.

Since the coal mining industry began to be developed in Mozambique in the 2000s, production and export levels have continually lagged behind forecasts. For example, in 2013, Business Monitor International forecast that 12.1 million tonnes of coal had been produced. In reality, a year later Business Monitor International admitted that only 3.8 million tonnes had been produced, whilst the UN Comtrade database shows that only 2.1 million were exported (see graph below). BIM’s forecast in 2014 (before a recent collapse in coal prices) had production increasing to 30 million tonnes by 2018, but production was already behind these forecasts.

Millions of Tonnes

Coal Production and Export in Mozambique

BIM 2013 Forecast BIM 2014 Forecast Actual Exported (ComTrade UN) Actual Produced (EITI Reports)

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Based on the three main coal mines in operation (Vale’s Moatize, ICVL’s Benga and Jindal’s Chirodze) production in 2015 is expected to have been around 9.6 million tonnes. If so, this would be a significant increase on the production of 5.3 million tonnes reported to the 2014 Extractive Industries Transparency

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Initiative report. Furthermore, a significantly smaller amount will be sold and exported. For example, the Benga mine is said to be producing 3.6 million tonnes, but only 35% of this (the coking coal) is being exported. The rest (10% thermal, 55% rejects) is being stockpiled. An industry insider said in 2014 that the mines which have been developed are disappointing for the ratio of coking coal that is actually produced, compared to cheaper thermal coal and coal of too poor a quality to be used.

Global coal production peaked in 2013 at 8,075 million tonnes, 14 and has been falling slightly since. Globally, coal prices have been falling since 2011, with coking and thermal coal price falling 15 at the same rate. Since 2011, prices of benchmark Australian coal have fallen by just over 50%.

There are several reasons for this fall in prices. Most immediately, there has been a fall in demand from China, both for thermal coal for power stations, and coking coal for steel production.

The industry body the World Steel Association expects Chinese demand for steel to fall by 3.5% in 2015, and a further 2% in 2016. Since 2000, China had been responsible for 80% of global 16 coal demand growth.

The Chinese fall in demand for coal may be ongoing if it reflects an end to the incredible construction boom of the last decade. But there are also other fundamental issues as well. Other sources of power generation are increasingly competitive against coal.

Gas and onshore wind are significantly cheaper, and solar has been falling dramatically in price and is getting closer to coal. In 2014, the world added more new wind power generation than coal power plants, whilst since 2010, two-thirds of proposed new 17 coal power plants worldwide have been stalled or cancelled. In India, coal power plant projects suspended or cancelled since 18 2012 outnumber completed plants by six-to-one.

The increasing acceptance of how dangerous a fuel coal is – both in terms of greenhouse gas emissions and hazardous local pollution – means governments are turning away. Coal mining and electricity generation also use large amounts of water; China 19 is on track for 20% of water use to come from coal by 2020.

As water becomes scarcer in certain regions due to population growth, increased agricultural production and climate change, this will be another reason to actively move away from coal.

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This long term outlook of coal being phased out is seen in market expectations beyond just immediate prices. The Dow Jones Total Coal Market index has fallen by 76% in five years, reflecting the fall in share price of coal miners and electricity producers with a 20 large share of coal in their energy generation mix.

Mozambique coal when exported tends to be sold at a higher price (on average 1.7x more than the Australian benchmark) than global benchmarks because of the better quality, and in particular the fact a large proportion of what is exported is coking rather than thermal coal. However, the average price achieved for exported coal fell by over 50% between 2012 and 2015. In 2016 it is likely to fall further as the World Bank predicts another fall in the average global (Australian) price (see graph below).

The World Bank forecasts that prices will only recover slowly from 2017 on. Based on a forecast of $70 per tonne on Australian coal in 2025, would imply around $119 for Mozambique coal. This means that even by 2025, prices would not have recovered to 2013 levels. Given that prices in 2013 were probably not enough to cover costs, it is unlikely that any developers will want to put money into new coal mines under current expectations.

$ per tonne

Coal Price and Forecasts, 2011-2025

In 2014 a Dutch consultant said all coal mining companies in Mozambique were currently making a loss, given low world market prices and the high logistical cost of transporting and

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Mozambique Coal Price Actual (Comtrade UN) Mozambique Coal Price Forecast (Based on Australian Coal Price Forecast) Australian Coal Price Actual (World Bank) Australian Coal Price Forecast (World Bank)

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exporting the coal out of Mozambique. An industry insider said in 2014 that even coking coal exports were making a loss. These claims were made before the continuing fall in coal prices in 2015.

The African Development Bank reported of Mozambique in 2015: “Since 2007 multi-billion dollar investments were made in mega coal mines and transport infrastructure, raising the country’s expectations about a knock-on effect on economic development and fiscal revenues. However, since then international coal prices halved and exports have been hampered by infrastructure and logistic insufficiencies. Currently all coal mining projects are 22 operating at a loss.”

Tata Steel said in early 2015 that it would not make new investments in coal in Mozambique, and is trying to sell the assets it owns, including its 35% stake in the Benga mine. Coal India announced in July it was giving up trying to develop mining in Mozambique because the quality of coal produced from its 23 concessions in Tete was too poor.

In July 2015, Chris de Vries from Johannesburg-based mining advisor at VenmynDeloitte said “Financing sources [to develop new mines and infrastructure] are going to remain difficult to tap 24 until the commodity prices have recovered.” Based on current and future projected coal prices, there is little prospect of any new mines being developed or the private sector funding any new transport infrastructure for extracting coal.

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Map: Mozambique EITI Compliant Mining Cadastre Portal – http://portals.flexicadastre.com/mozambique/en/

EXISTING COAL MINES

MOATIZE 25

Start year: 2011

Company: Vale Emirates Limited Current output: Vale claim 5 million tonnes per year. 3.7 million tonnes for 2014 was reported to EITI.

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Targeted output: 11 million tonnes per year Type of coal: Coking and thermal 27

Jobs: 1.101 locals and 323 immigrants (2012)

Government revenue: 1.516 million Meticals (2014)

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$48 million

Vale’s Moatize mine began production in 2011. The initial targeted production was 11 million tonnes a year with a further possible expansion to 22 million tonnes. However, these production levels have never been achieved. Vale says it produced 4.9 million tonnes in 2014, but only 3.7 million tonnes were reported to the Extractive Industries Transparency Initiative to have been produced, all of which were exported. It is possible that Vale has only reported the coking coal exported to EITI, but has included other coal in its production figures, even though it has no market to sell this to.

Production at Vale’s Moatize mine (Million Tonnes per Year)

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Based on production levels in the first 3 quarters of 2015, and an estimate for the final quarter, production in 2015 will be 5 million tonnes, though given the above it is likely significantly less than this will be sold. Recent publicity from Vale says they are now 29 targeting 11 million tonnes for mid-2016 , but there is nothing in production figures which says that this rate of expansion is being achieved. The amount it has invested in the Nacala corridor means that Vale is financially committed in some measure to coal in Mozambique, though the sale of stakes in the corridor and mine to Mitsui show it has tried to reduce its exposure.

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MINAS MOATIZE 30

Start year: 2011

Company: Consolidated Minerals e Global Coke 31

Estimated current output: 0 (10.800 tonnes em 2014) Targeted output: ?

Type of coal: ?

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Jobs: 214 locals and 12 immigrants (2012)

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Government revenue: 4 million Meticals (2014) $0.2 million The small Minas Moatize mine was developed by Beacon Hill Resources, listed in London. Beacon Hill was hit by the fall in world coal prices, and put the mine into ‘care and maintenance’ in late 2013. Beacon Hill went bust at the start of 2015. The mine now appears to be owned by Consolidated Minerals and India’s Global Coke who are supervising the mine, but it seems unlikely that any actual production is taking place.

BENGA 34

Start year: 2012

Company: International Coal Ventures Limited (previously Rio Tinto Mauritius)

Estimated current output: 1,6 million tonnes, 0,8 million sold and 35

exported in 2014

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Targeted output: 20 Mtpa (2016) Type of coal: Coking and thermal

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Government revenue: 312 million Meticals (2014)

$10 million

The mine has struggled to meet production targets, to export coal once produced, and of course has been hit by lower global coal prices. In 2014, Rio Tinto decided to sell-up, making a $4 billion loss when it sold Benga to India’s International Coal

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Ventures Ltd (ICVL) for just $50 million. In the first half of 2014 the mine had produced just 500,000 tonnes of coal, equally split 39 between coking and thermal. Benga has reported to the EITI that it produced 1.6 million tonnes in total in 2014, but only half 40 of this was sold and exported.

Current production is said to be around 3.6 million tonnes.

However, of this, only 35% is coking coal which is being exported (1.3 million tonnes). 10% is thermal coal and 55% rejects, which are just being stockpiled at the mine. The mine is currently 41 reported to be making a loss of $7.5 million a year.

CHIRODZI 42

Start year: 2013

Company: Jindal Estimated current output: 1 million tonnes per year?

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Targeted output: 10 million tonnes per year

Type of coal: Coking (thermal may be used for power plants if built) Production began at Jindal’s Chirodzi mine in 2013, with coking coal being exported for Jindal’s steel production in India. Whilst claims are made about producing 10 million tonnes of coal or more a year, at present the mine only has capacity to export 1 44 million tonnes a year through the Sena railway line. Presumably this would increase if the Sena upgrade is ever finished.

250 workers at the mine were reported to have gone on strike in January 2015, protesting against much higher wages being paid to immigrants and lack of face masks being provided. Workers claimed that Indians working at the mine received almost four 45 times more in wages that Mozambiquans doing the same job.

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2. TRANSPORT Prior to the collapse in global coal prices, one of the main barriers for exporting coal was the difficulty of transporting coal from Tete province to the coast. Three main railway lines have been discussed, the economic details of which are set out below.

Road transport from Tete is three times more expensive than rail 46 and therefore ’not economic’.

Map: Deutsche Welle

2.1 Sena line (Tete to Beira)

Portos e Caminhos de Ferro de Moçambique (CFM), the National

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The existing Sena railway line from Tete to Beira has a claimed capacity of 6.5 million tonnes of coal per year, though this has 47 never been met. In 2014 it is said by industry insiders to have 48 carried 3 million tonnes. Floods can force the line to close, and the railway has also been attacked by Renamo, forcing its closure.

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Ports and Railway Authority, had planned to increase capacity to 49 12 million tonnes by end-2014 and ultimately 20 million tonnes.

As well as improving the Sena line, this would also require major improvements at Beira port, which was also limited to 6.5 million 50 tonnes.

Management of the line was awarded as a concession contract to India’s RITES and Ircon, who formed a joint company Ricon, in 2004. Ricon held 51% of the ownership of the line for 25 years, with CFM retaining 49%. Under the contract, the line was to be fully rehabilitated by 2009. Following continual poor performance and failure to complete the planned work, in early 2011 the Mozambique government said the contract had still not been fulfilled and terminated it, passing management fully back to CFM. However, as of September 2015 it was reported that the upgrading was still not completed, with reports that even when it was, the line would still only be able to transport 6 million tonnes, with 51 further upgrading needed to get capacity to 19 million tonnes. It is unclear whether this additional upgrading will ever happen. This suggests that the maintenance originally planned to be finished by 2009 has still not been completed, never mind expansion.

Industry insiders say Sena will still not be able to carry more than 5 million tonnes a year.

Most of the concession contract project with Ricon was funded by $113 million of loans from the World Bank to the Mozambique government, most of which were disbursed by 2009. However, the lack of implementation by then, and the fact most of the work has happened since, suggests that this money was not spent effectively. The World Bank review of the project in 2012 said the project had been unsatisfactory and that the World Bank’s performance had been unsatisfactory and there was a 52 ‘substantial’ risk to the development outcome. However, the Mozambique government is liable for the full $113 million debt.

So far interest charges and fees have cost $14 million, and are now averaging $0.8 million a year. Repayments began in 2014 and are averaging $2 million a year and are likely to continue to 53 2050.

The World Bank is also lending the Mozambique government $50 million for technical assistance to help manage the mining and 54 gas sectors.

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Beira port requires constant dredging to keep it operational. In 2014 the Mozambique government granted a concession contract to Indian multinational Essar Ports to designed-build-ownoperate a new coal terminal to be transferred to the Mozambique government after 30 years. Essar Ports has a 70% stake in the contract, CFM 30%. However, it is not known whether this port will ever be built, and it is presumably dependent on the Sena line capacity upgrade taking place. Essar state on their website the new port will begin operating in 2017 with a 10 million tonne coal capacity, with a possible expansion in 2019 by a further 10 million 55 tonnes. In 2014, Essar agreed with shareholders a $25 million equity investment, but there have been no updates since. Neither are the terms of the contract with the Mozambique government public, including what guarantees the state have given Essar Ports for returns on their investment.

2.2 Moatize to Nacala line Since 2009, Vale have been redeveloping and building a railway line from Moatize to Nacala and a coal export port terminal. Much of the line already existed from Malawi to Nacala, but Vale have increased its capacity. New lines have been built from Moatize to Nakaya in Malawi, and to the new coal terminal.

There are four different ownership structures on the line: • From Moatize to the Malawi border, and from the existing line to the new coal terminal: New built line, owned 80% by CLN (shared ownership between Vale and Mitsui) and 20% by CFM, 91.3km • From the western Malawi border to Nakaya, 100% owned by Vale, 138.5km • From Nakaya to the eastern Malawi border, 98.6km, plus 698km in two branch lines. 51% owned by SCDN (which in turn is 67% owned by Vale), 49% by CFM

So whilst some of any profits from the line will go to CFM, Vale retains control of the line in terms of other operators. For coal exports, it makes sense for Vale to internally charge to keep prices low so that the railway concessions do not make money

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• From the eastern Malawi border to Nacala, 649.3km, plus 262km branch line, 51% owned by SCDN (which in turn is 67% owned by Vale), 49% by CFM

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(and so money is not passed to CFM), but costs are lowered for its mining operations.

One report for the Columbia Centre for Sustainable Development states that “Vale was allowed to buy the majority share in the CDN concession notwithstanding the Government’s general position of rail concessions to be independent of the mines. This is thought to be due to the complexity of the project crossing Malawi and the difficulty of finding a third party with the necessary 56 financial backing willing to invest.”

The conditions about third party access to the line have not been made public. The Columbia Centre report concludes that: “The regional and non-mining related benefits from an improved Nacala railway corridor will only be felt if multi-purpose access is guaranteed at competitive prices. With Vale being principally concerned about its coal exports, the Government of Mozambique needs to regulate tariffs of non-coal cargo and passenger services. If these are unable to pay cost recovery tariffs, CDN and the Government of Mozambique will need to come to an agreement about who will pay for the shortfall.”

The total cost of the building and redevelopment of the railway, and building of the coal export port, is said to be $4.3 billion. In December 2014 Vale sold a 50% stake in its subsidiary involved 57 in CLN to Mitsui, along with a 15% stake in Moatize mine. In theory this means Vale no longer has total control over the line, though Vale and Mitsui’s financial interests are aligned, and together they do.

It has been reported that the Moatize to Nacala railway line is 58 being part-funded by the EU, the Netherlands and the Danish 59 government. The Dutch and EU funding was said in 2009 to 60 be $500 million, though no sources report on whether this was loans. $100 million of financing, presumably loans, was also provided by the US government’s OPIC, but it is unclear whether this went to the state owned railway, or one of the private 61 companies involved. The Mozambique state may have to repay around $600 million, plus interest, for the line, but given Vale’s effective control, it is unlikely that CFM or the state will receive much back in revenue.

The railway line and port are planned to have a capacity of 22 62 million tonnes per year. The line is expected to begin operating

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late in 2015. However, the ability to export coal through Nacala port may have been delayed by the collapse of a coal stacker at 63 the port in July 2015.

2.3 Tete to Macuse In December 2013 Italthai (based in Thailand) won the concession to develop a greenfield railway from Tete to Macuse. It is thought the project would cost $5 billion, with particular difficulties being the section of the line in the Zambezi delta being prone to flooding.

It has been reported that 25 million tonnes of coal would need to 64 be exported each year for the project to be economically viable.

With current plans in the mining sector, this looks unviable, and so there seems little chance of the railway being built. Abdul Carimo, chair of the Zambézia corridor (Corredor de Desenvolvimento Integrado da Zambézia, CODIZA), admitted in April 2015 that there was no investor for the Tete to Macuse line.

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3.GOVERNMENT REVENUES FROM COAL 3.1 Past revenues from coal The main source of information on how much revenue the Mozambique government receives from coal extraction comes from the annual reports of the Extractive Industries Transparency Initiative.

On 1 January 2015 a new mining law was passed with changes to the tax regime. Any concessions already granted continue to operate under the old law, though tax rates changed little between the new and old law: 65

66

Tax under pre-2015 law: corporation tax of 32%, 3% royalties 67

Tax under post-2015 law: corporation tax of 32%, 68 (mining production tax)

3% royalties

Exemptions: exemption from customs duties and VAT for 5 years for import of equipment related to prospecting, research and exploration, exemption from VAT for services related to 69 drilling, exploration and construction, mining production tax cut by 50% if coal is to be used by local industry

2012 Extractive Industries report Discrepancies evidence of tax avoidance?

According to data released under the Extractive Industries Transparency Initiative, in 2012 2.5 Mt of coal were exported, generating $344 million of revenue ($138 per tonne). 70 The Mozambique government had been targeting 5.5 Mtpa and $718 million.71 The total revenue which accrued to the government was $48.8 million (6.8%).72 The Economics of Coal | Justiรงa Ambiental

However, according to the importers of coal from Mozambique, through the UN Comtrade database, Mozambique exported 2.1 MT of coal in 2012, but which generated $416 million of revenue ($198 per tonne). There is therefore a discrepancy of $72 million of revenue (20%) and a price difference of $60 per tonne (43%) between these two sets of data. It may be that coal exporters underreported the price they received for coal exports in order to reduce how much tax they are paying.

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Coal exports and revenue according to UN Comtrade database YEAR

COAL EXPORTED (Million Tonnes)

REVENUE ($)

PRICE PER WEIGHT ($ per Tonne)

MAIN DESTINATIONS

Million

Mauritius (26%), France (23%), Tanzania (18%), UAE (13%)

Million

India (42%), South Korea (13%), China (9%)

Million

India (27%), China (12%), UK (6%)

Million

India (51%), South Africa (12%), Germany (6%), UK (5%), France (5%)

Million

Government revenue from EITI reports YEAR

Total revenue, Million Meticals YEAR

Total revenue, Million Dollars In 2014, the Mozambique government received just $59.2 million of revenue from the coal mines, down $15.6 million on 2013, despite the increase in production. Of this, 75% was actually income tax paid by workers at the mines. Just $8.3 million (13%)

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was corporation income tax, and $7.9 million (12%) production tax. Both corporate income tax and production tax declined substantially in 2014, presumably due to the fall in the coal price (see graph and tables below). The $59.2 million received in 2014 amounted to just 1% of the government’s revenue.

Source: EITI Reports

Mozambique’s Public Revenue from Coal Mining 2011-2014, Million Dollars

Income Tax paid by workers Corporation Tax Production Tax

Corporation tax paid, Million Dollars YEAR

Income tax paid by workers, Million Dollars The Economics of Coal | Justiça Ambiental

YEAR

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Production tax paid, Million Dollars YEAR

3.2 Estimating government revenues from coal mining in 2015 and beyond As the coal price has fallen, companies have become less profitable, with all coal mines now said to be operating at a loss.

It is likely that corporate income tax revenues have fallen further in absolute terms, even with an increase in coal exports. The relative revenues from the mining production tax will also have fallen with coal price falls, but this will be offset if there have been increases in production. For corporate income tax purposes, loses are allowed to be carried forward for five years,73 so even if coal prices do recover, companies will be able to reduce or negate corporate income taxes for several years by carrying forward current losses.

Revenues from income tax on workers should have been more stable as these should only be related to the number of workers and wages, neither of which are affected directly by global coal prices, but neither do they necessarily increase with greater exports (as the main blockage to exports has been transportation).

Finally, most wages are likely to be denominated in Meticals, so could have fallen in dollar terms with the fall in value of the Metical against the dollar (though higher paid and immigrant workers are more likely to have wages denominated in dollars).

Together these factors suggest there is no reason why the proportion of coal mining revenue accruing to the government should have increased, and it is likely to have continued to fall.

Below we make two estimates for government revenue in 2015: Scenario A: Proportion of revenue accruing to the government has remained

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constant at 13% of export revenue as declared under UN Comtrade data. This would imply government revenues in 2015 of $50 million.

Government and export revenue from coal YEAR

Total Government

Total Export

Revenue from Coal

Revenue from Coal

million

Proportion of Export Revenue Accruing to the Government

million

million

million

million

million

million

million

million

million

Scenario B: Corporate income tax rate has changed with changing coal prices, reaching 0 at a price of $90 a tonne Individual income tax has increased from 1,376 million Meticals in 2014 (the amount reported in the EITI report) at the rate of Metical inflation Mining production tax has changed with changing coal prices, reaching 0 at a price of $0 a tonne Estimating government revenue in 2015 YEAR

COAL EXPORTED (Million Tonnes)

ComTrade UN

Revenue Accruing to Government Scenario A

Revenue Accruing to Government Scenario B

million

million

million

REVENUE ($)

million

(2015 Estimate)

million

$ per Tonne

(2015 Estimate)

million

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Under both scenarios, revenue falls again in 2015 due to the continued fall in the price of coal, in the absence of significant increases in production. We already know that the UN Comtrade database is recording lower overall coal export revenue from Mozambique in 2015.

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3.3 Predicting revenues for 2016 and beyond Below we estimate possible amounts of revenue the government could receive for 2016 and beyond. Key to this is assumptions about coal price and amount exported. For the price we use those estimates based on the World Bank current predictions, shown in section 1. Given the continual failure to meet targets and expectations, we predict exports continue to increase at the same rate as from 2012 to 2015, 26% a year.

Even with this large expansion in exports, which may never happen, and the coal price recovering to some extent, government revenue still only reaches $170 million a year by 2020 under scenario A, and $69 million under scenario B. Scenario B more adequately reflects the fact the bulk of the government’s revenue comes from workers income taxes, which will not increase due to price increases, and will be less effected by production increases, and therefore we regard the lower estimate of these ranges more likely, even if there is significant expansion in exports.

Estimating government revenue in 2016 and beyond YEAR

COAL EXPORTED (Million Tonnes)

REVENUE ($) ComTrade UN

Revenue Accruing to Government Scenario A ($ million)

Revenue Accruing to Government Scenario B

$ per Tonne

($ million)

3.4 Other estimates A 2012 study predicted government revenues under various forms of expansion. This assumed coal prices for coking coal of $175 and thermal coal $100, about 66% more than current prices. Under its scenarios, if exports remained limited at 6 million tonnes a year, government revenue would be negligible.

Under a second scenario where the Nacala and Sena lines were fully upgraded, and maximum transport capacity increased to 31 million tonnes per year, then revenues were predicted to be $150 million by 2016 and $1 billion by 2021 and beyond. Other

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scenarios for expansion were even more fanciful.74 In reality, this second production scenario is nowhere near being met, and coal prices are far below the assumption.

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4. JOBS Mining is a notoriously ‘capital intensive activity’, with very few jobs created compared to the amount of money which flows through the industry. A 2015 report written for Chatham House stated that mining is responsible for just 0.6% of jobs in Tete province.75 Relatively more jobs are created during the construction of mines, but these are by their nature temporary. Mozambique government officials have claimed that 13,000 jobs existed in coal mining in Tete when the now operating mines were being constructed.76 In 2012, Vale reported to the EITI that 1,101 Mozambicans77 were worked at the Moatize mine, plus 323 expatriates. In 2013 the same number of employees was reported to the BBC.78 Minas Moatize said there were 214 Mozambicans working at their mine, plus 12 expatriates. Rio Tinto refused to release figures.

As always, claimed figures are much higher than the actual amounts. In 2011, Vale claimed it employed 6,800 Mozambicans, with plans to increase to 12,750.79 These far higher numbers than revealed through EITI are either over-estimates, figures just for construction phases rather than production, or probably both.

The IMF and other research has previously estimated that coal mines could eventually employ 7,000 Mozambicans permanently.83 However, these figures are based on production expanding to 31 million to 85 million tonnes per year. If this did happen, it would means several tens of thousands losing their

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In 2013 the World Bank stated that the Benga mine employed 150 people (which seems too low), although also said that this amount could increase to 4,500.80 Jindal say 1,000 people are employed at the Chirodzi mine, and indicate that 10% of these are expatriates.81 In total this means at most 3,000 Mozambicans are probably employed directly by the coal mines.82 In contrast, 3,500 families (around 17,000 people) have lost their farmland through the development of coal mines so far. Many have lost livelihoods because land they have been provided with in compensation has been semi-arid and nowhere near the fertility of their previous land.

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farmland, with it being likely that they would again receive much less fertile land as ‘compensation’.

At the Chirodzi mine, it is stated that Mozambicans earn almost four times less than Indians doing the same job. The wage rate for a dumper truck driver reported in January 2015 was 7,500 Meticals a month,84 90,000 Meticals a year ($2,100). If all Mozambicans working at the mines earn this amount, this would be $6.3 million brought into the economy through direct employment a year. Some of this is already covered in figures above of revenue to the government through individual income tax.

Some of the wages to expatriate workers will also enter the Mozambique economy, but much may also be sent or saved back in the workers home countries such as India and Brazil.

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5. SUPPLIERS AND INDIRECT JOBS Research for the Instituto De Estudos Sociais e Económicos in 2012 states that “past experience indicates that local supply for inputs does not arise automatically; in many cases, it may be cheaper to import goods instead of building up local businesses to form a reliable local supply”. For example, in 2007, despite a programme specifically developed for buying local supplies, by 2007 the Mozal smelter was spending just $17 million on domestic suppliers (out of a turnover of $1.2 billion, so 1.4%). Furthermore, some of these were actually South African companies setting-up in Mozambique and actually selling imported goods.85 Under the 1 January 2015 Mining Law, foreign persons have to associate themselves with Mozambique persons in order to supply goods and services to the mining sector. Mining operators have to use Mozambique produced goods and services if they are of comparable quality, and don’t cost more than 10% of alternatives.86

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Imagem: A fundição de alumínio da Mozal no Google Earth

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6. DOMESTIC ELECTRICITY PRODUCTION Other than export, another possible use for Mozambique coal is domestic electricity generation. In theory, the lower grade thermal coal could be used, whilst the coking coal is exported.

In 2013 it was claimed that four power plants were proposed linked to Vale’s Moatize mine, Rio Tinto’s Benga mine, Jindal’s mine and the Ncondezi mine. All would initially have an output of 300MW, with an aim to increase to 1.8GW to 2.6GW, with a total capacity for all the four plants of 8.8GW.87 Of these, only the plant at Moatize has been granted a concession, in 2014. This plant is being built by Vale, Mitsui and ACWA power of Saudi Arabia. The current plans are just to build a 300MW power station, of which 250MW would be used for the Moatize coal mine, leaving 50MW for the national grid.88 In 201389 14,895 GWh of electricity were produced in Mozambique, virtually all from the Cahora Bassa dam. Of this production, much is exported, but much is also re-imported, and in total 14,176 GWh were consumed in Mozambique (95%).90 By far the largest user of this electricity is the Mozal aluminium smelter, at over 7,000 GWh a year. Until 2012, Mozal was paying just 1.6 cents per KWh for this electricity, a vastly subsidised rate given prices for other industrial users of 4.5-6 cents per KWh, and 9 cents for residential users. However, like coal mining, Mozal generates very little domestic revenue. A study in 2013 by the Jubilee Debt Campaign found that for every $1 paid to the government from the smelter, $21 leaves the country in profit and interest.91

As with coal mines, coal power plants generate relatively few jobs. An analysis of employment in coal power plants in South Africa shows that, on average, about 0.25 workers are employed

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In contrast to these figures, a coal power plant supplying 50MW to the Mozambique national grid, operating 80% of the time, would provide just 350 GWh, 2% of Mozambique’s current electricity production. If similar plants were built at the Chirodzi and Benga mines, again with most of the electricity being for the mine’s own use, this would mean just 1,050 GWh extra for the Mozambique grid.

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for every Megawatt produced.92 There are various options to expand electricity production in Mozambique, such as geothermal, gas, hydro, wind and solar, as well as coal.

The US Energy Information Administration has some of the most up-to-date cost estimates for different sources of electricity, published in mid-2015. Whilst these are estimates for electricity generation in the US, they can give some guide to the global state of different technologies.

Geothermal electricity is listed as potentially the cheapest source, 50% cheaper than conventional coal (the most polluting kind). A 2012 UN report said Mozambique has the potential for geothermal electricity generation, being at the southern end of the East African Rift System.93 Investigations into the geothermal potential in Mozambique have only just begun,94 so it is unlikely to be developed soon, but it is a possible resource for further in the future if prioritised. Kenya and Ethiopia have installed geothermal capacity of 215MW.95 Gas electricity generation is the cheapest of the fossil fuels, by around 25%. Mozambique’s gas reserves have already begun to be exploited, primarily for export, but one gas power station is being built.96 Gas is likely to have many similar problems to coal, but ultimately it is a cheaper and less polluting way to generate electricity. It is therefore difficult to envisage coal power stations being built primarily for supplying to the Mozambique grid, as opposed to coal mines building plants for electricity for their mines.

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US Energy Information Administration cost estimates for plants built 97 now and beginning operating in 2020

Onshore wind power has come down dramatically in cost in the last decade, and is often now the same price or cheaper than gas. Studies have started to be conducted in Mozambique, which suggest that there are useful wind resources on the coast around Maputo, in parts of Tete and parts of the north-east.98 Even more dramatic has been the fall in cost of solar photovoltaics, which have dropped in price by 80% since 2008.99 Whilst the latest US estimates still have solar more expensive than coal, it is now being predicted that solar will become the cheapest source of electricity in many countries in the next ten years.100 Mozambique has a huge solar energy availability, varying between 4 and 7 KWh per metre squared per day, averaging 5.7.101 Further large dams would be hugely destructive, but there is still much potential for small scale hydro, again a cheaper option than coal, even without including pollution costs. The Department of Energy estimates that there are 60 potential sites with potential of 1,000MW of capacity.102

Solar, wind and small-scale hydro all also have the advantage of being able to be operated in and by local, including rural, communities. This means they are more likely to enable access

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Biomass is an energy source which is cost competitive with coal.

The danger with biomass is that land is used that would have been used for food production. However, if heavily regulated, there is potential for biomass in the country on some of the estimated 41 million hectares of lower quality land not currently being used.103

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to electricity for rural and poorer people, rather than just providing energy to large multinational operators and the rich, and provide an income to rural communities for electricity which can be sold into the grid.

As well as creating the most carbon dioxide (the main greenhouse gas) for energy produced of any fossil fuel, burning coal also creates damaging local pollution.

Sulphur dioxide can cause or contribute to a range of respiratory diseases such as bronchitis and asthma, and particularly effects the elderly and the young.104 Sulphur dioxide also causes acid rain, damaging land, crops and water systems. One 300MW conventional coal power plant produce 6,500 tonnes of sulphur dioxide a year, whilst the more expensive advanced plant (with technology to reduce pollution) would be half that amount.105 Nitrogen oxides cause ground level smog, which can make people more susceptible to chronic respiratory diseases. One 300MW conventional coal plant would produce 4,500 tonnes a year, though this would fall to 1,500 with an advanced plant.106 Coal power plants also produce poisonous heavy metals such as mercury, lead and cadmium.107 These can enter the food chain, for example if getting into a lake or river they are consumed and remain within fish until eaten. The fly ash produced by a coal power plant also concentrates radioactive uranium and thorium. Coal power plants are currently thought to put into the environment 100 times more radiation than a nuclear power plant.108 The European Environment Agency has quantified what the health and environmental costs of certain air pollutants are in Europe.

Whilst all the costs of pollution cannot be counted in economic terms, such figures give some damage of the economic cost, in addition to the social damage, caused by pollution. Sulphur Dioxide is said by the EEA to cause between €9,800 and €28,600 of damage per tonne emitted, nitrogen oxides of between €4,400 and €12,000.

If these figures were applied to Mozambique, and if three 300MW conventional coal plants were operating, this would mean between €250 million and €720 million of damage a year. In the unlikely event that 8GW of coal plants were built in Mozambique, these figures would increase to €2.2 billion to €6.4 billion. Research for the International Energy Agency says that it is likely coal plants

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in Mozambique will be the most polluting kind because of the financial cost of fitting cleaner technology, so the high end of these figures are most relevant to Mozambique. More efficient and ‘cleaner’ coal power plants are said to be more economic at larger sizes and when providing base load power, whereas in Mozambique the plants would work intermittently, as Cahora Bassa provides the base load.109 In reality, this scale of financial cost would not be created because, for example, those suffering illness in Mozambique are far less likely to receive the same financial ‘cost’ medical treatment as in Europe, or the land degradation will have a lower financial cost because agricultural production has a lower ‘value’ than in the EU. What the large figures do indicate is the scale of health and environmental damage such air pollution can create, and the actual impact on people’s lives would be greater in Mozambique than in Europe because the same healthcare is not available, and because so many people are dependent on the land for their subsistence.

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7. LOSS OF LAND AND INCOME FOR THOSE DISPLACED When Vale developed the Moatize mine it displaced 1,365 families.

Under the resettlement process, Vale provided infrastructure of poor quality and insufficient housing conditions with poor access to water. Only one hectare of land was given rather than two which has led to malnutrition.110 Many families were previously self-sufficient but most have been moved to semi-arid land requiring irrigation, which has not been provided.111 The main impact of this is the serious reduction in quality of life and human rights for those affected, but there is an ‘economic cost’ as well of the loss of productive land and livelihoods.

Number of people displaced: Moatize: 7,237 people (estimated),112 1,365 households113 Benga: 3,600 people,114 679 households115 Chirodzi: 2,050 people, 484 households116 plus 968 households (estimate 4,100 people) have lost farmland but not homes117 For the Benga resettlement, Rio Tinto is said to have spent $50 million, yet most people have still been left worse off.118

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8. LOSS AND POLLUTION OF WATER RESOURCES Mines expose sulphur bearing rocks to air and water, creating sulphuric acid, along with poisonous heavy metals. This acid mine drainage pollutes local water supplies, killing fish and making the water dangerous for human health and agricultural use. It has been estimated that 29% of the water in the Zambezi river basin in Mozambique comes from tributaries in the coal mining area.119 A presentation on the Environmental Impact Assessment for the proposed Revuboe mine in 2011 found that there were already higher concentrations of heavy metals in the Revuboe river basin than stipulated as being allowed under Mozambique legislation.120 Coal mining companies often find ways to avoid paying for the clean-up of mines once they have finished production. In the UK, open-cast coal mines have gone bankrupt at the end of the life of mines, leaving local authorities with the cost of clean-up.121 Tailings dams can also burst, particularly during heavy rainfall and floods. In November 2015, a tailings dam at the Samarco iron ore mine in Brazil, jointly owned by BHP Billiton and Vale, burst. Thirteen people died and eleven are missing. The Brazilian government has estimated the cost of the dam burst as $5 billion, with the UN’s special rapporteur on human rights and the environment, John Knox, saying the equivalent of “20,000 Olympic swimming pools of toxic mud” spewed into the environment.

Heavy rains and floods in Tete are already a regular occurrence.

Climate change is expected to make heavy rains worse in Mozambique as warmer air can hold more water.122 This makes it harder to manage the waste from mines and makes toxic seepage from dams and dam bursts more likely.

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9. THE RESOURCE CURSE, DUTCH DISEASE AND CRISIS The resource curse is a widely seen phenomenon where countries which are rich in natural resources have high levels of poverty and inequality and slow or non-existent rates of economic diversification.

Many of the suggested reasons for why the resource curse exists have already been covered in this report concerning the Mozambique coal sector.

Firstly, the revenues from extractive industries tend to be captured by a small elite of multinational companies and the domestic elite.

This is seen in Mozambique with the relatively small amount of tax income the government is receiving from coal mining.

Linked to this is the relatively small number of jobs which are created, compared to the amount of money involved in the coal mining industry. The small number of jobs along with the lack of tax income means that little of the money generated by coal mines actually passes into the Mozambique economy.

On top of these reasons why revenue from extracting resources does not pass into an economy, there are also reasons why extraction damages other parts of the economy.

‘Dutch disease’ is a situation where the inflow of foreign currency into an economy to pay for investment in extractive sectors, and as revenue from those sectors, pushes up the exchange rate of the domestic currency. This exchange rate appreciation makes it harder for domestic producers of goods to sell locally, because imports are cheaper, and harder for exporters to grow their businesses, because the high exchange rate means their goods are too expensive in foreign markets.

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To some extent, the coal sector in Mozambique will have been limited from causing the Dutch disease because so little actual revenue from coal extraction has been transferred into Meticals and spent in the Mozambique economy. However, this will have happened to some extent, particularly during the development of the mines, when more money flowed into the Mozambique economy, but this was not sustained.

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Possibly more problematic is that expectations created concerning coal extraction and other mega-projects in the extractive sectors has led to speculation on the Metical and Mozambique economy, causing the Metical to be valued more highly against the US dollar than would otherwise have been the case.

This economic crowding out of other industries (which potentially could create far more jobs and domestic revenue) is also matched by a political crowding out. In many ways, the most damaging aspect of the focus on coal (and other mega-projects) is that this has diverted attention away from creating industries which could provide significant employment and income.

Since November 2014, the Mozambique Metical has been falling against the US dollar, collapsing by 25% between November 2014 and November 2015, due to the fall in prices for Mozambique’s commodity exports such as coal. This scale of fall could well be greater than justified based on the real impact of commodities on the Mozambique economy, but due to the exchange rate being overvalued in the first place.

One impact of the fall in the exchange rate is to make the real value of debts owed in foreign currencies much bigger. Mozambique is now discussing a new lending and structural adjustment programme with the IMF, where IMF loans will be used to pay off previous lenders, but the large debt which has been created over the last ten years will remain with Mozambique.

These wild swings in exchange rates indicates another reason for the resource curse, the huge variability which comes with dependence on extractive industries and commodities.

Commodity prices are wildly volatile, therefore the more an economy is dependent on commodities, the more it will suffer from economic shocks.

Since the mid-2000s, commodity exporters have enjoyed a long period of high prices, based on China’s economic growth and thereby high demand for commodities. During this period, Mozambique’s economic growth rate was very ‘impressive’, for instance doubling per person between 1996 and 2008. Yet by 2008, even according to the World Bank, there were 4.7 million more people living in poverty than there had been in 1996123 (2008 is the latest year with figures on poverty in Mozambique available from the World Bank, itself a shocking fact).

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The period of high commodity prices has now come to an end, bringing with it a potential economic crisis for Mozambique.

UNCTAD reported in April 2015 that Mozambique was one of the most commodity dependent countries in the world, with commodities accounting for over 90% of merchandise exports.124 There can now be little expectation of much revenue or economic benefits from the coal mining industry, but these were largely a myth anyway. This presents an opportunity to focus on developing alternative industries instead which create jobs, reduce the need for imports, increase exports and diversify across a range of products that are not so vulnerable to wild swings in price.

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REFERENCES

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13 https://eiti.org/files/6o_relatorio_vpublicada.pdf 14 IEA. (2015). Coal information 2015 http://www.iea.org/publicatie ons/freepublications/ publication/coal- information---2015-edition---excerpt.html 15 http://www.economist.com/news/business/21647287-more-countries-turn-against-coalproducers-face- prolonged-weakness-prices-depths 16 http://www.economist.com/news/business/21647287-more-countries-turn-against-coalproducers-face- prolonged-weakness-prices-depths 17 http://www.economist.com/news/business/21647287-more-countries-turn-against-coalproducers-face- prolonged-weakness-prices-depths 18 Shearer, C., Ghio, N., Myllyvirta, L. e Nace, T. (2015). Boom and bust: Tracking the global coal plant pipeline. Março de 2015.

19 http://www.economist.com/news/business/21647287-more-countries-turn-against-coalproducers-face- prolonged-weakness-prices-depths 20 http://www.economist.com/news/business/21647287-more-countries-turn-against-coalproducers-face- prolonged-weakness-prices-depths 21 http://www.partnersvoorwater.nl/wp-content/uploads/2015/01/Economische-analyse-finalversion.pdf 22 Banco Africano de Desenvolvimento. (2015). African Economic Outlook 2015 – Mozambique. http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2015/CN_data/CN_Long_EN/ Mozambique_G B_2015.pdf 23 http://articles.economictimes.indiatimes.com/2015-07-07/news/64177866_1_two-coal-blocksmozambique-blocks-thermal-coal e http://www.macauhub.com.mo/en/2015/03/03/indian-groupjindal-africa- remains-in-mozambique/ 24 http://www.reuters.com/article/2015/07/28/mozambique-coal-idUSL5N1081H520150728 25 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 26 https://eiti.org/files/6o_relatorio_vpublicada.pdf 27 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 28 https://eiti.org/files/6o_relatorio_vpublicada.pdf

29 http://www.reuters.com/article/2015/07/27/mozambique-coal-stackeridUSL5N10738O20150727 30 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 31 https://eiti.org/files/6o_relatorio_vpublicada.pdf 32 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 33 https://eiti.org/files/6o_relatorio_vpublicada.pdf 34 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 35 https://eiti.org/files/6o_relatorio_vpublicada.pdf 36 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 37 https://eiti.org/files/6o_relatorio_vpublicada.pdf 38 Banco Africano de Desenvolvimento. (2015). African Economic Outlook 2015 – Mozambique. http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/2015/CN_data/CN_Long_EN/ Mozambique_G B_2015.pdf 39 http://www.mining.com/rio-tintos-3-7bn-mozambique-coal-business-sold-for-50m-72265/ 40 https://eiti.org/files/6o_relatorio_vpublicada.pdf 41 http://www.financialexpress.com/article/industry/companies/mozambique-mine-eating-intoassets-of-icvl- tatas/63447/ 42 http://www.jindalafrica.com/mozambique 43 http://www.miningweekly.com/article/mozambiques-coal-sector-still-embattled-but-bottlenecksshould- soon-go-2015-10-16-1 44 http://www.africaoutlookmag.com/outlook-features/jindal-mozambique 45 http://allafrica.com/stories/201501161480.html 46 Baruya, P e Kessels, J. (2013). Coal prospects in Botswana, Mozambique, Zambia, Zimbabwe and Namibia. IEA Clean Coal Centre. Dezembro de 2013.

47 http://www.scpafrica.com/features/tete-mozambiue-s-elusive-investment-horizon.html 48 Baruya, P e Kessels, J. (2013). Coal prospects in Botswana, Mozambique, Zambia, Zimbabwe and Namibia. IEA Clean Coal Centre. Dezembro de 2013.

49 http://www.scpafrica.com/features/tete-mozambiue-s-elusive-investment-horizon.html 50 http://www.scpafrica.com/features/tete-mozambiue-s-elusive-investment-horizon.html 51 http://www.clubofmozambique.com/solutions1/sectionnews.php? secao=business&id=2147491346&tipo=one 52 Banco Mundial (2012). IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39910) ON A CREDIT IN THE AMOUNT OF SDR 75.60 MILLION (US$110 MILLION EQUIVALENT) TO THE REPUBLIC OF MOZAMBIQUE FOR A BEIRA RAILWAY PROJECT 53 Com base nos termos padrão da IDA de período de carência de 10 anos e vencimento em 40 anos 54 http://www.worldbank.org/projects/P129847/mining-gas-technical-assistance-project?lang=en 55 http://www.essar.com/common.aspx?cont_id=g850IVgcokU= 56 http://ccsi.columbia.edu/files/2014/05/Case-Study_Mozambique-March-2014.pdf 57 http://www.vale.com/mozambique/PT/press/releases/Paginas/Moatize-e-o-CorredorLog%C3%ADstico-de- Nacala-d%C3%A3o-boas-vindas-a-novo-investidor.aspx and http://www.ft.com/ cms/s/0/887f03b2-7fb4-11e4- b4f5-00144feabdc0.html#axzz3odNrEmVZ 58 Vines, A., Thompson, H., Jensen, S.K., e Azevedo-Harman, E. (2015). Moçambique até 2018: Gerentes, mediadores e magnatas. Junho de 2015. http://www.chathamhouse. org/sites/files/chathamhouse/field/field_document/20150622Mozambique2018Vi nesThompsonKirkJensenAzevedoHarman.pdf 59 http://news.bbc.co.uk/1/mobile/world/africa/8290661.stm 60 http://www.railwaygazette.com/news/single-view/view/moatize-coal-link-funded.html 61 https://www.google.co.uk/url? sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja &uact=8&ved=0CCAQFjAAahUKEwifs8vr-YrJAhVIiRoKHZWhADY&url=https%3A%2F%2 Fwww.opic.gov%2Fsites%2Fdefault%2Ffiles%2Fdocs%2Fnewsletter %2FOPICNews0507. pdf&usg=AFQjCNHt136t5tphWrTW8lnr2EZO5cYwGQ&sig2=V6Qc4VNG0U4ao3zzqS8A8w and http:// www.nedbank.co.za/website/uploads/files/infrastructure%20project.doc

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62 http://www.scpafrica.com/features/tete-mozambiue-s-elusive-investment-horizon.html 63 http://www.reuters.com/article/2015/07/27/mozambique-coal-stackeridUSL5N10738O20150727 64 http://uk.reuters.com/article/2014/07/22/mozambique-coal-thailand-idUKL6N0PX4T920140722 65 https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/mining-countryguides/Documents/Mozambique-mining-country-guide.pdf 66 http://uk.reuters.com/article/2014/02/06/mozambique-coal-idUKL5N0LB1ZK20140206 67 https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/mining-countryguides/Documents/Mozambique-mining-country-guide.pdf 68 https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/mining-countryguides/Documents/Mozambique-mining-country-guide.pdf 69 https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/mining-countryguides/Documents/Mozambique-mining-country-guide.pdf 70 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 71 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 72 Intellica. (2014). Quinto Relatório da EITI-M – 2012. Dezembro de 2014. https://eiti.org/files/ EITI-M %20report%20%28english%29.pdf 73 http://www.iese.ac.mz/lib/publication/III_Conf2012/IESE_IIIConf_Paper19.pdf 74 http://www.iese.ac.mz/lib/publication/III_Conf2012/IESE_IIIConf_Paper19.pdf 75 Vines, A., Thompson, H., Jensen, S.K., e Azevedo-Harman, E. (2015). Moçambique até 2018: Gerentes, mediadores e magnatas. Junho de 2015. http://www.chathamhouse. org/sites/files/chathamhouse/field/field_document/20150622Mozambique2018Vi nesThompsonKirkJensenAzevedoHarman.pdf 76 https://www.modernghana.com/news/452768/1/mozambique-admits-mining-boom-wont-solvejobs- cris.html 77 576 pessoas locais, 525 provenientes de outras regiões de Moçambique 78 http://www.bbc.co.uk/news/world-africa-22015732 79 http://www.sourcewatch.org/index.php/Moatize_mine#cite_note-9 80 Banco Mundial. (2013). World Development Report 2013. https://books.google.co.uk/books? id=y9qmtlBJPk4C&pg=PA200&lpg=PA200&dq=Benga+mine+employees+jobs&source=bl&ots=9X5lsH fdqL&sig= WUEpKLrMRIYfTk65PLFK4k2tWEo&hl=en&sa=X&ved=0CEkQ6AEwB2oVChMIhoezysPnyAI VjFsUCh2KWQT1#v=o nepage&q=Benga%20mine%20employees%20jobs&f=false 81 http://issuu.com/outlookpublishing/docs/jindalmozambique-businessbrochure 82 1.100 pela Vale, 900 pela Jindal e mais 1.000 no máximo em Benga e Minas Moatize.

83 http://www.iese.ac.mz/lib/publication/III_Conf2012/IESE_IIIConf_Paper19.pdf 84 http://allafrica.com/stories/201501161480.html 85 http://www.iese.ac.mz/lib/publication/III_Conf2012/IESE_IIIConf_Paper19.pdf 86 http://www.shearman.com/~/media/Files/NewsInsights/Publications/2014/10/MozambiquesNew-Mining- Law--A-ReBalancing-Act-PDF-102714.pdf 87 Baruya, P e Kessels, J. (2013). Coal prospects in Botswana, Mozambique, Zambia, Zimbabwe and Namibia. IEA Clean Coal Centre. Dezembro de 2013.

88 http://www.esi-africa.com/mozambique-approves-600-mw-coal-fired-power-station/ 89 O último ano com estatísticas disponíveis 90 http://www.iea.org/statistics/statisticssearch/ report/?country=Mozambique&product=electricityandheat 91 http://jubileedebt.org.uk/reports-briefings/report/whose-development-is-it 92 http://www.iese.ac.mz/lib/publication/III_Conf2012/IESE_IIIConf_Paper19.pdf 93 http://www.os.is/gogn/unu-gtp-sc/UNU-GTP-SC-15-1102.pdf 94 https://pangea.stanford.edu/ERE/db/WGC/papers/WGC/2015/16031.pdf 95 http://www.os.is/gogn/unu-gtp-sc/UNU-GTP-SC-15-1102.pdf 96 http://www.cnbcafrica.com/news/resources/2014/01/14/japan-funds-$174-mln-newmozambique-gas- fired-power-plant/ 97 http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

98 http://www.gestoenergy.com/page.php?idLang=1&menu=3&article=11172 99 http://www.ibtimes.co.uk/solar-energy-be-cheapest-power-source-10-years-says-report-1489228 100 http://www.ibtimes.co.uk/solar-energy-be-cheapest-power-source-10-years-says-report-1489228 101 https://www.internationalrivers.org/files/attached-files/clean_energy_for_mz_30_9_09.pdf 102 https://www.internationalrivers.org/files/attached-files/clean_energy_for_mz_30_9_09.pdf 103 https://www.internationalrivers.org/files/attached-files/clean_energy_for_mz_30_9_09.pdf 104 http://www3.epa.gov/airquality/sulfurdioxide/health.html 105 http://www.ucsusa.org/clean_energy/coalvswind/c02c.html#.VjtVMrfhDIU 106 http://www.ucsusa.org/clean_energy/coalvswind/c02c.html#.VjtVMrfhDIU 107 http://www.ucsusa.org/clean_energy/coalvswind/c02c.html#.VjtVMrfhDIU 108 http://www.scientificamerican.com/article/coal-ash-is-more-radioactive-than-nuclear-waste/ 109 Baruya, P. e Kessels, J. (2013). Coal prospects in Botswana, Mozambique, Zambia, Zimbabwe and Namibia. IEA Clean Coal Centre. Dezembro de 2013.

110 Nota de pesquisa da JA “Is this development?”

111 https://www.hrw.org/news/2013/05/23/mozambique-mining-resettlements-disrupt-food-water 112 Com base no rácio de pessoas por agregado familiar nos reassentamentos de Benga 113 https://www.hrw.org/report/2013/05/23/what-house-without-food/mozambiques-coal-miningboom- and-resettlements 114 http://devpolicy.org/mining-resettlement-and-lost-livelihoods-a-case-study-frommozambique-20150721/ 115 https://www.hrw.org/report/2013/05/23/what-house-without-food/mozambiques-coal-miningboom- and-resettlements 116 https://www.hrw.org/report/2013/05/23/what-house-without-food/mozambiques-coal-miningboom- and-resettlements 117 https://www.hrw.org/report/2013/05/23/what-house-without-food/mozambiques-coal-miningboom- and-resettlements 118 http://devpolicy.org/mining-resettlement-and-lost-livelihoods-a-case-study-frommozambique-20150721/ 119 http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=3809325&fileOId=3809328 120 Minas de Revuboè (2011). Avaliação de Impacto Ambiental do Projecto de Mineração de Carvão do Revuboè, Distrito de Moatize, Província de Tete. Março de 2011 http://www.revuboe.com/_ literature_47499/Presentation_(Eng) 121 http://www.theguardian.com/commentisfree/2015/apr/28/big-coal-keep-it-in-the-groundenergy- opencast-mines 122 http://www.bloomberg.com/news/articles/2015-04-16/climate-change-blamed-as-shifting-floodplains- plague-mozambique 123 Banco Mundial. Base de dados dos Indicadores de Desenvolvimento Mundiais. 124 CNUCED. (2015). State of commodity dependence 2014. http://unctad.org/en/PublicationsLibrary/suc2014d7_ en.pdf

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