Agenda:
Today: Results released from the 2017 National Census
Today: Renamo’s National Council meets in Nampula to ratify leader Ossufo Momade’s choice of secretary general
Today: World Bank president David Malpass starts a five-day visit to Mozambique, Madagascar and Ethiopia
Today: Eni Mozambico holds a public consultation on its offshore drilling plans for Area A5-A, to be held in the Hotel Radisson Blue in Maputo
Today: Second day of Spanish Queen Letizia’s two-day visit to Mozambique
The latest from Zitamar News:
Mozambique government fails to pay April salaries after T-bond auction failure
The Mozambican government is working to find a solution to pay civil servants’ salaries for April, which were due last week, after failing to borrow MZN 3 billion from the domestic banking system
The best of the rest:
- Anadarko could pick Occidental over Chevron (Reuters, Financial Times)
- Major floods hit Pemba after Cyclone Kenneth (Joseph Hanlon)
- Judge moved from ‘hidden debts’ trial says he was pressured (O País)
- Cimentos de Moçambique closes Matola cement factory (O País)
Anadarko could pick Occidental over Chevron (Reuters, Financial Times)
Anadarko will begin negotiations to sell the company to Occidental Petroleum instead of Chevron, the company said in a statement today after the board determined that a cash and stock offer from Occidental may be superior to the $50bn deal it agreed in early April with Chevron. Chevron is expected to raise its offer, but if it finally loses out to Occidental, Anadarko would have to pay Chevron a $1 billion break-up fee, according to the terms of their agreement.
Sources have told Zitamar Chevron will increase its offer to $82/share - versus Oxy’s latest offer of $76/share. An Oxy win could mean a delay to the Mozambique LNG project however. Oxy will have to sell off a lot of assets to make the newly enlarged company viable and although its chief executive said last week that her company would push ahead with developing the Mozambique project, the company’s lack of LNG experience means many expect it would in fact sell. Anadarko announced last week that Area 1 had been designated ‘first mover’ of the two projects in the Rovuma Basin, but if there are significant delays to the project reaching FID, perhaps the government will award this right to Exxon.
For now, however, things look like they will move forward as planned as Chevron is still most likely to come out top in this bidding war. Chevron’s CEO wrote a letter to President Nyusi early last week, expressing the company’s commitment to honour the LNG agreements already in place - and FID is now expected at the end of May. First resettlements at the site should start in the next 30 days and Zitamar understands that Mozambique’s security forces have also complied with Anadarko’s latest request to improve security at the site, following the attack on an Anadarko convoy in February.
Major floods hit Pemba after Cyclone Kenneth (Joseph Hanlon, MediaFAX)
Category 4 cyclone Kenneth has destroyed thousands of houses on Cabo Delgado’s islands and in the districts of Macomia, Quissanga and Mocimboa da Praia. There was torrential rain south of the path of the cyclone on Sunday, causing flooding in Pemba, which is now without electricity. Many bridges are down, and Pemba can’t be reached by road. Initial relief teams have reached Macomia, but flooding may soon close that road too. On Ibo island, administrator Issa Tarmamade says that 4000 houses have been destroyed and there is no power or mobile phone network. The island is still beyond reach, in part because the rain is grounding aircraft. In Nampula province, Nacala Porto, Monapo, and Memba districts are affected by heavy rain.
An emergency team of Brazilian firefighters was operating throughout the weekend in the affected areas in Pemba. The World Food Programme managed to send one aid flight to Ibo this morning before the rains closed in, preventing a second flight from going. From Ibo, the UN was planning to take some of the aid further north to Quissanga by boat - but again it looks like the weather will make that impossible. Weather forecasts indicate better conditions by Monday afternoon
Judge moved from ‘hidden debts’ trial says he was pressured (O País, Savana)
Délio Portugal, the judge responsible for denying bail to high profile defendants in the Mozambican ‘hidden debts’ case, has said he felt pressure to reverse his decision before he was transferred to a different job in Matola this month. He would not say if he was threatened, but did say the pressure “resulted from the fact of trying to do my job correctly and independently”.
The judicial apparatus is also putting significant pressure on the media to suggest Portugal’s removal was a “normal decision”. The body is heavily politicised and has a significant number of Guebuza allies filling key positions. Given the country’s history of legal professionals being murdered for taking on the powerful, it certainly requires courage to jail the former head of the Secret Service and the son of the former President.
Cimentos de Moçambique closes Matola cement factory (O País, Mediafax)
A lack of demand has led Cimentos de Moçambique to close its $25 million cement factory in Matola, O País reports. The company’s director general, Edney Vieira, said Mozambique’s cement industry has been operating below capacity for years.
Other sources have suggested to Zitamar that they are not closing the factory, just downgrading their operations in Matola, Dondo and Nacala. Zitamar has written a number of times about the challenges facing Mozambique’s cement industry; present demand is estimated at only 2.5 million tonnes per annum, while production capacity is 4.5 mtpa, but new factories still keep springing up. CM faces strong competition from these smaller factories which produce lower quality cement, but at a price more accessible to the poorer segments of Mozambican society looking to build their own houses.
Following completion of the Maputo-Katembe bridge, construction sources say there are no significant infrastructure projects planned, and the buildings still under construction are owned by Turkish contractors which get the supply from their own factories around the outskirts of Maputo. Post Idai reconstruction in Beira will create more demand, but this is expected to be met by factories in the area.
Company Announcements
- Syrah Resources produced, sold, and shipped 48kt natural flake graphite in Q1 2019. It is targeting production of 50kt in Q2, and 250kt for 2019 as a whole.
