Mozambique Coal Rush
Coal is abundant in Mozambique and mining companies from around the world will soon begin exporting coal from the region to China and India. Rowan Moore Gerety reports that coal exports will bring billions of dollars to Mozambique but that gain comes at a price.
GELLERMAN: From the Jennifer and Ted Stanley Studios in Somerville, Massachusetts, this is a recycled edition of Living on Earth. I'm Bruce Gellerman. The red-hot economies of China and India have been cooling off in recent months, but their demand for coal is still voracious. The nations burn coal to provide two thirds of their energy.
And while both China and India are coal rich, they’re still looking overseas for new sources. The east African country of Mozambique is a prime place for a multinational mining company seeking to satisfy their demand, but as Rowan Moore Gerety reports, Mozambique’s coal rush may extract a high price.
[SOUNDS OF CUTTING WOOD, continues in the background]
MOORE GERETY: On the banks of the Zambezi River, Manuel Maenda cuts firewood near his home in Benga village. It’s hot – well over 100 degrees – and Maenda wears a worn nylon cowboy hat to escape the sun.
MAENDA (through translator): I’m cutting this wood to help me get by.
MOORE GERETY: Maenda drags the wood to his bicycle, propped against a tree in a speck of shade. He’ll bring the wood home to cook, or use it to produce charcoal which he sells on the side of the road to Tete, the provincial capital. Maenda points in the distance to large yellow dump trucks clearing rock.
MAENDA (through translator): You see? People lived right there. All the way up to Nganja, over there. Some left at the end of last year. Others went this year.
MOORE GERETY: The land now belongs to Rio Tinto, a British-Australian mining company that’s one of the world's largest. Rio Tinto will soon begin exporting coal from Mozambique, primarily to buyers in China and India. Tete is one of the driest regions in the country, and one of its least populated. But the land in the Zambezi river valley is prime real estate, largely because of access to water—and coal.
THERON: Well, they say it's the world's largest undeveloped coal basin, and it's got huge resources of coking and metallurgical coal.
MOORE GERETY: That’s Gerritt Theron, a geologist with the Ncondezi Coal Company. Ncondezi is still in the prospecting phase, but mine construction in the region has already displaced some 2,000 families. Before the resettlements of other villages nearby, Rio Tinto representatives came to Benga to speak with the locals. They promised help, like building a water source right in the village. Manuel Maenda says his community appreciated the gesture.
MAENDA (through translator): We were having problems with crocodiles attacking people and so forth, and so, they built it, and nobody goes to the river now or has problems with crocodiles.
MOORE GERETY: Now, women wash their clothes in a shaded pavilion in the middle of the village, thanks to the same pipe that brings water to the mine. All around Benga, more dramatic changes are taking place: construction is everywhere.
[SOUND OF CONSTRUCTION]
MOORE GERETY: Multiple hotels are going up. 4x4s are cruising through the bush. I asked Theron who’s driving the boom.
THERON: I think there's just a huge demand for coal now—with China, and India. Everybody that makes steel will be interested in it.
MOORE GERETY: Today, coal accounts for 20% of greenhouse gas emissions and more than a quarter of the world’s energy use. Still, the planet as a whole will burn 50% more coal in 2030 than it does this year. Already, the price of coking coal has increased six-fold in a decade. Prices for thermal coal are also at record-highs.
But the flip side of increased demand is reduced supply. Many experts believe that 'peak coal' — when the world’s maximum coal production rate is reached — will come as early as 2030, or 2025. In China's case, it could be 2015, or even sooner, while China currently mines more coal than the next three largest producers combined. Theron says that this economic pressure has changed the bottom line for mining companies.
THERON: And with the high prices that the guys are willing to pay now, you can exploit these resources which were uneconomical in the past, for instance Tete, which didn't have any railways to the ports or infrastructure.
MOORE GERETY: The Brazilian mining giant Vale has already begun exports by rehabilitating a colonial railway to the coast. More will have to follow, and ports too - the existing line can only transport a fraction of the coal Vale hopes to produce.
Meanwhile, 35 more companies are looking for coal throughout the province. Ncondezi, for one, has drilled more than 10 miles of boreholes. Today, they've decided to drill one more. With the backhoe out of commission, local workers are preparing the site by hand.
[SOUNDS OF SHOVELING AND FRIENDLY CHAT]
MOORE GERETY: These jobs are one reason that the District Administrator, Manuel Guimaraes, has high hopes for his district, Moatize.
GUIMARAES (through translator): Already, Moatize is advancing. And it's advancing in big steps.
MOORE GERETY: Locally, Guimaraes says that the coal projects have created 1500 jobs for Moatize residents, and brought medical clinics and schools in addition to Benga’s water source. Still, more than half the land in Tete Province has been licensed for prospecting.
Even if only a small number of projects become working mines, the implications for land use and resettlement are extensive. Rio Tinto is lobbying to dredge the Zambezi river and use it to transport coal. Guimaraes and many people here treat the mining projects with an air of resignation.
GUIMARAES (through translator): We all need to understand that mining in Moatize is irreversible. We have to learn to deal with the process because we have no way to stop it. The world today needs the resources that Moatize has.
MOORE GERETY: Local officials may have little choice but to take Guimaraes' view. In 2012, coal from Moatize will boost Mozambique's exports by 13%. With more than half the state budget dependent on foreign aid, mining has become a top priority. Lucia Francisco has worked on community development projects in Tete for more than a decade. She worries that locals have lost out in the government’s eagerness for investors.
FRANCISCO: There is so little community consultation, because all the licenses, and all the projects are being designed in Maputo. The Governor has no say. What he does is to go to the community and say, 'Please, this is not my will, but this part of land has been already allocated to someone. We have to leave'.
MOORE GERETY: All the same, says Francisco, the local people were understanding when they heard about resettlement. Some were even excited. From villages near the river, they were moved to Cateme, 20 miles away. The mining companies Vale and Rio Tinto built them concrete houses, known here as "casas melhoradas," or improved homes. But the houses were poorly built, and there are cracks throughout the walls. The area is isolated and arid.
FRANCISCO: And they are really suffering because there are no rivers or streams that they can get water. No shops.
MOORE GERETY: Cateme is at the end of a bumpy dirt track on a dusty plateau. In the center of the settlement, vendors chat and sift corn at a small market.
[SOUNDS OF SIFTING CORN IN A BASKET]
MOORE GERETY: Farming was an important source of income for the communities that were resettled in Cateme, yet none of this corn was grown here. Even the district administrator, Manuel Guimaraes, recognizes that the lack of water has made agriculture hard.
GUIMARAES (through translator): Right now, frankly, there are problems with pockets of hunger in the population there.
MOORE GERETY: There may soon be other reasons to worry. Studies in the US have linked open cast coal mining to higher rates of cancer, pulmonary diseases and birth defects from air and water pollution. In Moatize, many people and livestock drink straight from the rivers. According to Lucia Francisco, environmental effects of the mines have not gotten sufficient review.
FRANCISCO: And nobody speaks about the pollution. Everybody says the mining is good, because it's bringing money to the nation, but they don't even ask whether this open mining is going to damage their life.
MOORE GERETY: Rio Tinto recently published a report that estimates coal exports will earn Mozambique $15 billion over the next 25 years, but the government has not yet disclosed how mining revenue will be spent. The arrival of ‘peak coal’ globally is expected to push coal prices even higher. Mining companies here will surely gain as a result. The locals are hoping they will too. For Living On Earth, I’m Rowan Moore Gerety in Tete, Mozambique.
GELLERMAN: And we have an update to our story. Mining giant Rio Tinto just exported its first shipment of coal from Mozambique. The coal is headed to a steel mill in India.
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