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Mozambique this week: Sovereign savings, East African partners, and a a fossil-fuelled future

The Zitamar Weekly Podcast, 30 April 2022

Mozambique this week: Sovereign savings, East African partners, and a a fossil-fuelled future

Welcome to this week’s Zitamar Podcast, featuring news and analysis from the Zitamar team who discuss the week's most important events.

The war in Ukraine has meant talk of a transition away from fossil fuels has taken a back seat — particularly in places like Mozambique, which could be an important provider of coal and gas as western countries stop buying from Russia.

Brazilian mining company Vale this week tied up its sale of the Moatize coal mining project to India’s Jindal — then revealed that the project had had perhaps its most profitable quarter ever, in Q1 this year.

Vale’s coal mine turns 38% profit as prices spike ahead of cut-price sale to Jindal

A senior official at the energy ministry confirmed Mozambique cannot afford to stop exporting coal — and his boss, minister Max Tonela, said the gas industry will bring new opportunities.

We should soon hear from the IMF about its outlook for the Mozambican economy, but all the signs are that it sees gas as crucial to Mozambique’s future. One way the gas revenues can affect the future of Mozambique is through the establishment of a sovereign wealth fund — and one of the conversations you’ll hear in this podcast is with sovereign wealth fund expert Andrew Bauer, on the pitfalls Mozambique needs to look out for if it goes down that road. This section starts on 15:51 minutes.

Tanzania is also looking to get its dormant LNG project off the ground, something that will play in to increasingly complex relationships between Mozambique and its neighbours in East Africa and the Great Lakes. In the wake of President Nyusi’s trip to Uganda this week, we spoke to Peter Bofin of the Cabo Ligado project to try and unpick the different dynamics at play. Peter’s interview begins at 33:33.

But we start off with a look back at the week’s political and economic developments, with Zitamar editor Tom Bowker, and Mozambican journalist Fernando Lima.

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