Hundreds of Mozambican mine mineworkers are facing the harsh reality of unemployment as the nation’s coal sector buckles under the combined pressures of violent post-election protests and a significant drop in global coal prices. The country’s largest coal operation, the Moatize mine owned by Vulcan International, is leading the wave of retrenchments, having informed the government of its intention to lay off 105 workers.
Adelaide Jantar, a provincial inspector at Mozambique’s Ministry of Labour, confirmed the grim news, stating that Vulcan, the Mozambican arm of Indian tycoon Naveen Jindal’s conglomerate, cited a company restructuring and the sharp decline in coal prices as the reasons behind the painful cuts. Vulcan’s website indicates a substantial workforce of 3,365 individuals directly employed at its Tete province operations, highlighting the significant impact of these job losses on the local community.
Adding fuel to the fire, Jantar revealed that other coal mining companies within Mozambique are also implementing substantial workforce reductions, pushing the total number of dismissals into the hundreds. The violent upheaval that followed the contested elections in October has further exacerbated the industry’s woes. “We have never witnessed such a staggering number of dismissals in recent times,” Jantar lamented, underscoring the severity of the current crisis.
Despite repeated attempts for comment, Vulcan Mozambique remained silent on the unfolding situation. Jindal’s company acquired the Moatize mine from Brazilian giant Vale in a $270 million deal concluded in late 2021, inheriting an asset now seemingly caught in a perfect storm of economic and political instability.
The repercussions of this downturn extend far beyond individual livelihoods. Coal exports represent Mozambique’s largest source of foreign revenue, generating a substantial $2 billion in sales last year, according to the nation’s central bank. The recent slump in coal prices, with coal futures loaded at South Africa’s Richards Bay port plummeting by approximately 17% since the beginning of the year, casts a long shadow over the country’s economic prospects.
As the dust settles on the post-election unrest, the Mozambican coal sector faces a challenging period of adjustment. The confluence of global market forces and domestic instability has created a precarious situation, leaving hundreds of families facing an uncertain future and raising concerns about the broader economic health of the nation.
