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Maputo — Maputo 13 May (AIM) - The Mozambican government has guaranteed that it is carefully following the entire process of the withdrawal from the country of the Brazilian mining giant, Vale.
Vale says it intends to sell off its coal mining operations in the western province of Tete. In preparation for this, Vale reached an agreement in April with its main partner, the Japanese company Mitsui, on the transfer of interests, from the Japanese company to the Brazilian miner, which in turn will sell the entire coal extraction and export project to a new entity.
The transaction with Mitsui was made for the symbolic price of one dollar, but all associated expenses and charges - including an outstanding balance of 2.5 billion dollars - pass to Vale.
Vale announced in January that following the acquisition of Mitsui's stakes and, consequently, following the simplification of the business and asset management, it will begin the process of divestment of its stake in the coal business.
This, it said, will be guided by the preservation of the operational continuity of the Moatize open cast coal mine and the railway line from Moatize through southern Malawi to the northern port of Nacala-a-Velha, through the search for a third party interested in these assets.
Vale employs around 8,000 people, close to 3,000 direct workers and the remainder sub-contracted. Before selling off its assets, Vale is making investments which it hopes will help it resume production, reaching 15 million tonnes of coal in 2021 - after 5.1 million tonnes in 2020.
The Mozambican Minister of Mineral Resources and Energy, Max Tonela, on leaving a round-table on Thursday between Mozambique and the European Union, which shared experiences on questions of regional economic integration, said the government wanted to ensure that there is no break in continuity in coal operations.
"The government has been following this process to ensure that there is no risk to the continuity of coal mining operations in Moatize, or of the Nacala-a-Velha rail corridor", he said.
The negotiations between Vale and Mitsui on transferring the Japanese interests to Vale were now reaching their conclusion, explained Tonela. This would allow Vale to take 100 per cent of the mine and of the railway. "This step should be over in the next few weeks", he said.
Vale has hired some investment banks to advise the company in identifying potential buyers with the technical and financial competence to replace Vale at the head of the two projects.
Asked whether Mozambique will benefit from capital gains tax on Vale's sale of the mine and railway, Tonela said that was a question for the Mozambican Tax Authority (AT). But he thought the possibility of a capital gains tax windfall was remote, since the Moatize mine has fallen sharply in value, due to the decline of coal prices on the world market.
Vale has been operating the mine for the past decade, usually at a heavy loss. Only in two years, 2017 and 2018, did the mine run at a profit.
Source: Allafrica.com

Grain Millers Association of Zimbabwe (GMAZ) chairperson Tafadzwa Musarara says the cereal processing group has successfully pleaded with government to ban maize imports and related products in a move tailored to ring-fence this year's good harvest.
Addressing journalists in Bulawayo Thursday, Musarara said the move was also meant to ensure the local market was protected for the benefit of local millers.
"In order to safeguard everything, we then agreed with government that they are going to ban the importation of maize into the country.
"Importation of maize meal and any other maize processed products is going to be banned.
"This is meant to ring-fence our harvest and make sure that the market is protected for the local."
Musarara said his association was also working with government to stop side marketing in what should see farmers supply the staple to government through the Grain Marketing Board (GMB).
Under the arrangement, millers will buy from GMB while contracted farmers will be able to recover on their investment.
The GMAZ boss said his association has also engaged government to ensure police roadblocks were set up on all major roads from feeder borders.
"We are aware of imports that might come from Zambia, South Africa, Mozambique and Malawi," he said.
"The whole region has received a bumper crop, so we are fully behind government in the setting up of roadblocks from the main feeder boarders and we will partly contribute financially to that programme as in funding the entire policing so that side marketing is killed.
"Side marketing for the past decade has been affecting the successful implementation of contract farming in this country.
"I am happy that government this time is coming very strongly so that our bumper harvest, our local agriculture is protected.
"Internationally, imports come to fill a deficit but in Zimbabwe, it has substituted the local products. We are really thrilled that the government is correcting this in a big way."
Source: Allafrica.com

Sub-Saharan Africa's economies will begin to recover from last year's coronavirus shock and grow again this year. But a predicted 3.4 percent growth rate will fall behind that of the rest of the world, says the International Monetary Fund (IMF).

In its six-monthly economic outlook for the region, published on Thursday, the agency attributes its expectation of a slow recovery to a slow delivery of vaccines to Africa and the lack of resources to stimulate economies.

"Many advanced economies have secured enough vaccine doses to cover their own populations many times over and are looking to the second half of the year with a renewed sense of hope," the IMF says.

"In Africa, however, with limited purchasing power and few options, many countries will be struggling to simply vaccinate their essential frontline workers this year, and few will achieve widespread availability before 2023."

Similarly, the agency says advanced economies are being helped to recover from the coronavirus pandemic by "trillions in fiscal stimulus and continued accommodation by central banks". But this is not an option in sub-Saharan Africa: "If anything, most entered the second wave [of the pandemic] with depleted fiscal and monetary buffers."

Increased exports, higher commodity prices and a recovery in private consumption and investment are expected to reverse last year's average contraction in the region's economies of 1.9 percent.

"However, per capita output is not expected to return to 2019 levels until after 2022 – in many countries, per capita incomes will not return to pre-crisis levels before 2025," the IMF predicts.

It adds that the region's low-income countries will need U.S. $245 billion between 2021 and 2025 to help recover lost ground, while the whole of sub-Saharan Africa will need $425 billion.

Looking back over the last year, the director of the IMF’s African Department Abebe Aemro Selassie said that although the contraction was not as bad as had been feared, 2020 was still the worst on record.

"The pandemic has had a devastating impact on the region’s economy," he said. "The number of extreme poor in sub-Saharan Africa is projected to have increased by more than 32 million. The 'learning loss' has been enormous, with students missing 67 days of instruction, more than four times the level in advanced economies."

Calling for more to be done to help defeat the virus in Africa, Selassie said in most countries the cost of vaccinating 60 percent of the population would need an increase in health spending of 50 percent.

"For the international community, ensuring vaccine coverage for sub-Saharan Africa is a global public good. Restrictions on the dissemination of vaccines or medical equipment should be avoided, multilateral facilities such as Covax should be fully funded, and excess doses in wealthy countries should be redistributed quickly."

The IMF nevertheless strikes a note of optimism in promoting previous prescriptions for future growth.

"Despite scarring from the crisis," the executive summary of the IMF outlook says, "sub-Saharan Africa’s potential is still undeniable, and the need for bold and transformative reforms is more urgent than ever – these include revenue mobilization, digitalization, trade integration, competition, transparency and governance, and climate-change mitigation."

Source: Allafrica.com