Good afternoon. The threatened shutdown of the Mozal aluminium smelter is threatening 37,000 direct and indirect jobs, according to the CTA business association (see below). In a statement this week, the CTA said that Mozal contributed 3% of Mozambique’s GDP and 30% of its exports. But its future is menaced by a dispute between the business’ majority owner and operator, South32, and the government over how much it should pay for power. In these circumstances, the CTA should be standing up for Mozambican businesses. But it is failing to do so.
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Yesterday the CTA called a press conference where its president Álvaro Massingue raised the alarm about 20 contracts with suppliers which he said Mozal had terminated. That is indeed something the association should be responding to. Unfortunately, the CTA’s prescriptions fall short. Massingue called for the cancelled contracts to be reinstated, for more local suppliers to be hired by Mozal (according to newssheet Mediafax, he accused Mozal of favouring South African over Mozambican businesses) and for 40% of Mozal’s aluminium production to be reserved for the domestic market.
These are fanciful demands which have no basis in reality. For a start, it is a traditional complaint of Mozambican business owners that they are overlooked in favour of foreign (especially South African) businesses. This is an essentially nationalist or protectionist argument to the effect that Mozambican firms should be given priority for winning contracts. The same kind of argument surfaced when it emerged that a security firm with majority Rwandan ownership was helping to protect the TotalEnergies-led gas project in Cabo Delgado province. It was outrageous to some that a Rwandan firm had one this contract, and was evidence of a Rwandan takeover. But there was no evidence to support such an analysis. The company in question, whose security guards are hired in Mozambique, was selected from several bidders through a tender process.
