Governance of Africa’s Resources Programme POLICY BRIEFING 56 September 2012 Neissan Alessandro Besharati 1 AFRICAN PERSPECTIVES. GLOBAL INSIGHTS. EXECUTIVE SUMMARY S ixteen years of civil war, which ended in 1992, left Mozambique as one of the poorest countries in the world. Still today Mozambique’s human development index ranks the lowest in Southern Africa, with a life expectancy of 52 years and a literacy rate of 47%. Like several other African countries, however, Mozambique’s economic potential lies underground. In recent years the discovery of large reserves of gas, oil and coal has attracted foreign investors from across the globe. FDI net infows of foreign direct investment have risen to 9% of the country’s gross domestic product. Coal alone represents 61% of the country’s mineral commodities, making Mozambique the second-largest exporter of coal in Africa, after South Africa. Coal production in Mozambique reached 35 700 tonnes in 2010 and is expected to reach 20 million tonnes by 2015. The growing mining industry is also contributing to Mozambique’s much- needed infrastructure development, with electricity lines, roads, railways and ports being constructed to service the needs of foreign investors. This coal revolution is bringing high hopes, but questions still remain. It is yet to be determined whether the mining sector can become the new engine of growth for the country, and whether these billion dollar investments will trickle down to the poor. How much is the mining industry really contributing to the development of Mozambique? THE ARRIVAL OF THE COAL GIANTS Mozambique’s total coal reserves are estimated as high as 20 million tonnes, with most of these deposits situated in the Moatize and Raising Mozambique: Development Through Coal RECOMMENDATIONS • Government’s policy framework for harnessing foreign mining investment to spur local, provincial and national development processes should include guidelines on community relocations and CSR standards. • Government should ensure the transparency and public accountability of all its agreements with companies in the extractive industry. This should include publically available information on concessions, taxation regimes, relocation plans and corporate social investments. • Stronger mechanisms for communication, consultation and co-ordination among government departments, companies, communities and civil society should be established. These should take place at national, provincial and local levels, to promote effective collaboration among all stakeholders affected by mining activities. • Mining companies should align and integrate their social investments with national and sub- national development plans. Such corporate social projects should foster ownership and capacity development of local authorities and communities. Mining companies should improve their CSR monitoring and evaluation systems and promote learning among companies.