Welcome to Zitamar’s daily Mozambique briefing for 26 February, 2018.

The latest from Zitamar News:

EU sugar reforms signal tough times ahead for Mozambique producers
The removal of a cap on EU sugar production and therefore the prospect of oversupply in the European market means Mozambican producers will need to start looking for new buyers.

The best of the rest:

Anadarko in talks with Indian buyers to sell LNG (LiveMINT)
Anadarko is in talks with nine Indian companies to sell gas from its Rovuma Basin LNG project, Indian online business publication, LiveMINT reports. Negotiations are taking place with Petronet LNG, Oil and Natural Gas Corp (ONGC)., Hindustan Petroleum Corp, Bharat Petroleum Corp. and Gujarat State Petroleum Corp, among others, according to an unnamed source.
ONGC, Bharat Petroleum Corp. and Oil India Limited are shareholders in the Area 1 consortium, so it makes sense that they – along with other Indian companies – would look to buy LNG from the project. However, as these offtakers don’t have the same credit-worthiness as buyers in East Asia, and as domestic gas prices are capped in India meaning they can’t afford to pay much for cargoes, the Area 1 consortium had been planning to sell to these players in the second phase of development rather that the first. In today’s tough market, however, beggars can’t be choosers.

Inhambane governor blames Sasol for infrastructure failings (DW)
The governor of Inhambane province Daniel Chapo has said he has “lost faith” in South African energy company Sasol, saying the company has failed to implement its social governance agenda since arriving in the country 14 years ago, or paying enough tax. In particular, he pointed out that the company has failed to rehabilitate the Maxixe ferry quay.
Whatever the rights and wrongs of how Sasol behaves in Mozambique, they are certainly a convenient punch bag for Chapo to distract from his own failings. The Maxixe quay was destroyed in the Dineo storm last year and the government has failed to fix it, causing serious inconvenience to those who need to cross between Maxixe and Inhambane city. This is the first we’ve heard of it being Sasol’s responsibility.

Nestlé in talks to open dairy factory in Beira (O País)
Swiss food giant Nestlé is “70% of the way” to building a dairy factory in Beira, but progress has been delayed by changes in the company’s strategy in recent months, according to minister of trade and industry Ragendra de Sousa.
The rather vague announcement – typical in our experience of de Sousa – appears timed to coincide with Nyusi’s trip to Switzerland. Beira has apparently been chosen for its ease of access to the hinterland countries, which are currently supplied by Nestlé facilities in South Africa.

Zimbabwe, Botswana discuss Techobanine rail-to-port project (Southern Times)
A planned railway from Botswana through Zimbabwe to a proposed port on Mozambique’s coast, south of Maputo, was discussed by new Zimbabwean president Emmerson Mnangagwa on a visit to Botswana last week, according to Zimbabwe’s Foreign Affairs and International Trade Minister Sibusiso Moyo.
It’s hard to see what the upside of this project is for Mozambique, which already has rail links from Zimbabwe to ports at Beira and Maputo which can take more coal – and does not generally take kindly to attempts by its hinterland neighbours to dictate how they send goods through the country (see, for instance, Malawi’s repeated frustrated attempts to use the Zambezi River). A new port South of Maputo would also be an ecological disaster for Maputo Special Reserve, and the coastline between Maputo and Ponta do Ouro, where Mozambique has ambitions to grow its tourism industry.

New ambassador to Zimbabwe appointed (Presidency)
President Nyusi has appointed Francisco Cigarro as his new ambassador to Zimbabwe, the latest in a series of diplomatic moves since Nyusi made Jose Pacheco foreign minister in December.
The move sees Cigarro return to the region from the United Arab Emirates – destination of the $2 billion borrowed by ProIndicus, EMATUM, and MAM – where he served as ambassador since being appointed in 2014 by Armando Guebuza.

South Africa expects to sign Mozambique extradition treaty soon (News 24)
South African police minister Fikile Mbablula said he and the Mozambican government are going to sign an extradition treaty in an effort to combat cross-border crimes. Speaking in the northern KwaZulu-Natal town of Manguzi on Friday, close to Mozambique’s southern border, Mbablula said the treaty will “ensure that criminals hiding in Mozambique will be sent back to South Africa to stand trial.

Agenda:

• Today: Meeting of the Bank of Mozambique’s monetary policy committee.
• Today: Second day of an official four day visit by president Filipe Nyusi to Switzerland, where he will speak at the 37th session of the United Nations Human Rights Council.
• Today: Talk on “The Independence of Courts” by the president of Portugal’s supreme court Antonio Silva Henriques Gaspar, moderated by the head of Mozambique’s constitutional council, Hermenegildo Maria Cepeda Gameto.

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