Mozambique Mining: German group graphite mine operation to start yet this year

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Graphite samples

Mozambique natural resources and geographical position attracts interest of German investors, says in Maputo the head of delegation of the German Chamber of Commerce for Southern Africa, Friedrich Kaufmann, quoted by Deutsche Welle (DW).

So far, Germany had little economic presence in Mozambique. Are present only about 40 companies, mainly the branches of logistics, engineering or chemistry – some big names, such as the companies Siemens and ThyssenKrupp technology and Merck pharmaceutical.
However, by the end of this year, due to operation start of the graphite mine in the town of Ancuabe province of Cabo Delgado, the German group AMG Graphit Kropfmuhl, as announced Friedrich Kaufmann, head of delegation in Maputo of the German Chamber of Commerce for Southern Africa, in an interview with DW.

DW Africa: How tries to convince German businessmen to invest in Mozambique?

Friedrich Kaufmann (FK): Mozambique is a country rich in natural resources, especially gas, coal, graphite and semiprecious stones. Logistically, it has a very interesting position in Southern Africa, with ports, airports and links with the so-called “hinterland countries” – Malawi, Zambia and Zimbabwe. Logistics is very interesting for German companies.

DW Africa: With regard to natural resources, it is possible to start operating a new German mine?

FK: We have for many years the design of a graphite mine in Ancuabe. After much preparation, we expect the mine to be opened later this year. Graphite is a very valuable resource, much sought after in the international market. In addition to coal, which is already exported in Mozambique, graphite can be a second engine of natural resources for the country.

DW Africa: Armed conflict between government forces and the opposition RENAMO has created some problems attracting investors from Germany?

FK: not yet because, in the conflict zone – especially the provinces of Manica, Sofala, Zambezia and Tete a little – we do not have German companies. The graphite mine is located in the northern province of Cabo Delgado. They are also peaceful areas. Manica, Sofala and Zambezia are mainly agriculture and tourism provinces and Germany traditionally is not in these sectors in Mozambique and in virtually all of Africa. So there are no major problems. The south and Maputo are hardly touched by the consequences of armed conflict.

DW Africa: And the economic crisis, with increasing debt, the devaluation of the metical and rising inflation, worries the German businessmen present in Mozambique?

FK: Absolutely. Its a big problem. Currently there is a shortage of foreign exchange and Mozambique is still an economy that depends on imports – which are paid in foreign currency. The dollar, the euro and the rand are necessary to pay the bills. If you can not pay the bills, we reach a point that the processes of production and sale in Mozambique are impossible. A small German company, with three or four people, Uranus, imported parts, engines and machinery from Germany and has closed its doors, because they simply can not pay transactions.

DW Africa: What has been the secret of other companies? Pay for own and hope one day to recover the foreign currency necessary?

FK: Exactly. And there’s another option: some companies that are subsidiaries of German companies or international German companies in South Africa have access to foreign exchange by the companies to which they are affiliated. Economically, these companies are able to help or make transactions. For example, large banks in Mozambique can survive because banks such as Standard Bank and Barclays have access to hard currency reserves by banks in South Africa, England or other countries.

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