Opportunities in Mozambican mining

Mozambique

Mamadhusen Chivambo, CEO of Grupo Videre, talks to The Energy Year about the Group’s ongoing ventures in mining and renewable energy and devising incentives to reinforce Mozambique’s industrial sector. Grupo Videre is a business development company that operates in the power, oil and gas, mining and real estate sectors.

What are Grupo Videre’s current projects in mining?
Grupo Videre is focused on expanding its precious metals strategy in gold with investment in new drillings at its operational underground mine in Tete and advancing geological studies for new sites.
In non-metallic minerals, we focus on fuel minerals, specifically coal. We are a partner at Minas de Moatize, which became operational in late 2023 and is producing thermal coal that we sell to the region. We have also been expanding our investment into coking coal since August 2024 and ROM [run-of-mine] coal as a sub-product.
Looking forward, we plan to invest in high-growth minerals such as graphite, vanadium and lithium, which are crucial for the battery industry. A recent price drop forced us to delay our first lithium venture and to maintain cashflow we have temporarily switched to small-scale quartz mining until lithium prices rebound.
We recently finalised a report documenting the exceptional quality of our graphite concession, which holds large-flake graphite and vanadium. With logistics solutions nearing completion, this asset will position Grupo Videre to capitalise on Mozambique’s status as a major player in the graphite market.
In addition, we are finalising studies to provide logistics at terminals for bulk minerals in the centre and north of the country to guarantee price sustainability to compete with the global market.

What is needed to make Mozambique’s mining sector more competitive?
First, the government should prioritise the domestic processing of minerals over exports. Incentivising the construction of processing facilities within the country would help create secondary industries, such as the production of batteries from Mozambican graphite.
Second, the government needs to tighten controls because a large portion of precious metals and stones are smuggled out of the country. Establishing stricter regulations, legalising artisanal mining and implementing export controls could significantly increase domestic production and government revenue, with a positive effect on our GDP.
Third, the government should elevate the importance of mining. The Ministry of Mineral Resources and Energy oversees too broad a range of sectors, including oil and gas. Creating a dedicated body focused solely on mining would demonstrate a stronger commitment to the sector’s development. Mozambique is in a prime position to capitalise on global minerals demand. The country has abundant, easily accessible mineral resources and infrastructure for export. What’s missing is a focus on industrialisation to position Mozambique as a competitive player in the global market.

Who do you see as Mozambique’s and Grupo Videre’s highest-potential investment and project partners globally?
In the power sector, South Africa and the EU, especially for renewables, are preferred partners due to the strength of their energy sectors and their experience establishing funding mechanisms at competitive cost.
For mining projects, a two-pronged approach is best. Bulk minerals like graphite and coal can most benefit from financially focused partners in Australia, Canada and the UK. They have a history of funding resource extraction projects and have regional expertise.
When dealing with precious and non-precious metals and stones, China becomes the best partner. European and American investors often have stricter requirements and demand higher risk premiums. Chinese companies have a bigger appetite for risk and, in addition, they often have established equipment and logistics networks in Africa, which makes them very efficient partners for mining development.
In the services segment, our organisation prioritises industry leaders such as Agility, a prominent logistics company in the Middle East and Africa, and Menzies, a global leader in airport handling. We are also partners with TSebo, the largest African catering and facility management company.

What is the outlook for renewables projects in Mozambique?
Solar is becoming the most cost-effective renewable energy option. Technology has lowered installation costs and European development funds dedicated to solar projects offer attractive interest rates, so solar projects are becoming easier to finance compared to traditional energy.
Mozambique’s location positions it well to become a major power supplier within the Southern African Power Pool. The country already exports electricity to neighbouring countries such as Zambia, Malawi, Zimbabwe and South Africa. However, this market is being limited by economic and political instability and establishing offtake agreements remains a challenge.

Grupo Videre was involved in the development of the Kuvaninga Energia gas power plant. What is the importance of this facility for the country?
Kuvaninga was the country’s first independent power producer, pioneering a new project finance investment model that achieved financial closure with 100% commercial funds. Its development demonstrated the validity of mechanisms such as PPAs [power purchase agreements] and gas supply agreements that were new at the time.
Securing an offtaker wasn’t a major hurdle as the project had a guaranteed buyer in EDM [Electricidade de Moçambique], the national electricity company, which channelled the power for gas production in Gaza province. Since the gas was partly royalty gas owned by the government, it was possible to negotiate a price with a competitive electricity output that satisfied EDM, which is not so easy today, especially with commercial funds.

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