Mozambique is on the cusp of a mining boom, according to industry experts, with its vast reserves of minerals propelling it towards the forefront of the African mining sector. President Filipe Nyuse affirmed this burgeoning potential, revealing that the country’s extractive industries raked in a staggering $12.3 billion between 2020 and 2024.
“This revenue contribution is a testament to Mozambique’s growing importance in the global mining landscape,” says Lara Smith, founder and MD of Core Consultants, an independent mining consultancy. “The country boasts a treasure trove of minerals, from coal and natural gas to dazzling gemstones like rubies, sapphires, and emeralds.”
Cabo Delgado, Nampula, Gaza, and Tete are just a few of the mineral-rich provinces that are propelling Mozambique’s rise as a key player. “These regions are turning heads with their wealth of resources,” exclaims Smith.
Graphite Bonanza Fuels Electric Vehicle Dreams
The discovery of new bounties, particularly graphite, is a major driver of Mozambique’s mining surge. This critical component for lithium-ion batteries is in high demand as the electric vehicle (EV) industry charges forward. Recognizing this golden opportunity, Mozambique has been strategically scaling up graphite production, with a particular focus on its mineral-rich northern regions.
“The future looks bright for Mozambique’s graphite output,” says Smith. “Experts predict a significant rise in both coarse and fine natural graphite production in the coming years.”
Syrah Resources: A shining example of foreign investment
Australia-listed Syrah Resources is a prime example of how international investment is fueling Mozambique’s mining ambitions. The company has invested a cool $300 million into processing plants and infrastructure, including crucial logistics, to mine and process natural graphite from its Balama operation in Mozambique.
“Syrah’s high-grade graphite reserves, boasting a 50-year lifespan, are poised to be a game-changer for Mozambique,” explains Smith. “This investment puts the country on the map as a strategic supplier of graphite resources.”
More Than Just Minerals: Mozambique Embraces Sustainability
While Mozambique’s mineral wealth is undeniable, the country is also taking significant strides towards environmental responsibility. The government’s commitment to sustainable practices is evident in its climate change policies and active participation in discussions on low-carbon development.
“The mining industry in Mozambique is becoming increasingly aware of the importance of environmental, social, and governance (ESG) matters,” says Smith. “Companies are re-evaluating their priorities to ensure long-term sustainability.”
Furthermore, Mozambique’s participation in the Extractive Industries Transparency Initiative (EITI) underscores its dedication to revenue transparency, a critical factor in attracting further foreign investment.
Security Concerns Cloud the Horizon
Despite Mozambique’s vast mineral endowment, security concerns pose a significant challenge. The country’s dependence on foreign investment to develop its mining industry is particularly vulnerable to political instability.
“Mozambique’s ability to capitalize on its immense offshore potential hinges on maintaining political stability and mitigating the threat of terrorism,” cautions Smith.
Since 2017, the horrific reality of terrorism has plagued Mozambique’s northern Cabo Delgado province. Al Shabaab, a jihadist group with ties to ISIS, has launched terror attacks and disruptive insurgency activities, displacing hundreds of thousands of innocent people.
The devastating humanitarian impact is compounded by the economic consequences. These terror networks have crippled the administrative machinery, bringing natural gas field projects in Cabo Delgado to a grinding halt. Major multinational companies, TotalEnergies and ExxonMobil, have been significantly affected.
The threat of terrorism extends beyond the gas fields. Syrah Resources was forced to suspend logistics operations at its mine in 2022 due to terrorist attacks. Furthermore, the Islamic State’s Mozambique branch is attracting foreign fighters from across the region, fueling the rise of terrorism and illegal trafficking of precious metals.
“While these incursions are currently contained in the northern Cabo Delgado region, they have resulted in the displacement of over 540,000 people, with children accounting for more than half of that number,” says Smith, highlighting the human cost of this conflict.
A Future Filled with Promise
Despite the challenges, Smith remains optimistic about Mozambique’s future as a major mining producer. The country is anticipating record production of tantalite and gold this year, solidifying a growth trajectory that underpins its economic development goals.
Mozambique is also strategically positioned to be a key player in the global shift towards a green economy, with its contributions to the EV market and renewable energy sectors.
“By integrating its mining sector with these broader economic and environmental objectives, Mozambique is charting a course to become a prominent mining destination in Africa,” concludes Smith. The future glitters brightly for this resource-rich nation.
