The Political Economy of the Coal Industry in Mozambique

Abstract

Tete Province’s coal industry has been at the core of national economic and political debates in Mozambique since its boom in 2007 when the Brazilian giant Vale signed a 35-year contract with the government of Mozambique. The debates ranged from positive to negative expectations created at local and national levels regarding the potential benefits that the extraction of coal would bring. Such contradictory expectations grew when, after Vale, another mining giant Rio Tinto arrived in Tete through the purchase of Riversdale’s assets. With two big multinational coal companies in town, Tete seemed to be a province kicking away poverty. After some years, the reality of the mining projects showed up the various angles of the coal industry, from how problematic the resettlement of peasants was to the loss of houses and arable land – a situation of accumulation by dispossession. There were unmet expectations of business opportunities for local and national enterprises. Moreover, there were unmet expectations of massive financial contributions by the coal mining companies to the local and national economy. The expected “development” has not come to Tete, although a handful of Mozambican companies have benefited from the coal industry, thus creating uneven development. This thesis tackles the uneven development created in Tete by interrogating how socio-economic and environmental aspects of the Tete Province coal industry contribute to Mozambique’s uneven development. Using the political economy analysis framework, the thesis investigates the particular underpinning reasons why Tete’s coal industry has not transformed the local and national economies. After a decade of operations, the actors in Tete changed. Rio Tinto departed leaving its assets with the International Coal Ventures Private Limited (ICVL). Vulcan overtook Vale. Indian companies currently dominate Tete coal mining. Despite the change of actors, the coalmine projects in Tete continue to be problematic: a source of accumulation by dispossession and a driver of uneven development.