Good afternoon. There is nothing very surprising or interesting about the fact that contracts for mining and gas projects are being debated in the run-up to next month’s elections (see below). The idea that the contracts need to be renegotiated is an old and popular conviction, a time-worn cliché that nobody really questions or checks. Hence the subject has been raised by the presidential candidates, but without explaining which contracts should be renegotiated, why, and what aspects need renegotiating.
The full Daily Briefing continues below for Pro subscribers. Subscribers to the Zitamar News tier can read the top half, including the full leader article, here.
Former president Joaquim Chissano, who has been talking about it, ought to know. It was under his presidency in the 1990s that quite generous contracts were negotiated with South African petrochemicals firm Sasol, for gas production in Inhambane province, and with aluminium maker Mozal to buy electricity. In general, natural resources contracts agreed at this time gave considerable tax breaks to investors. The Sasol contract has since been reworked, and Sasol has been pushed into investing in the Temane power station, while the Mozal power contract, a bargain at $0.03 per kilowatt hour, is being renegotiated ahead of its expiry in 2026, and is expected to rise significantly.
