Turbid Energy Politics in Mozambique & Malawi how Rio Tinto was burned

Catching a glimpse of the headline in today’s Australian Financial Review (AFR) ‘Power price hikes from gas boom’ I decided to pick up a copy from the local supermarket. It soon became obvious that Australian state governments needed to have a good long look at the volumes of LNG being exported from Australia and the impact this has on domestic energy prices.

Next to the gas story was something that for me was far more interesting, a long article by Ayesha de Krester titled Sold Down a River.

A basic premise in de Krester’s article is that Rio Tinto showed a lack of diligence in preparations for a large coal mining project. Rio Tinto bought the mining lease for a $4 billion coal deposit in the Moatize Basin Tete province Mozambique, from Riversdale. A relatively small Sydney-based miner Riversdale lacked the weight of a Rio when it came to bending a government to its wishes.

An ambitious plan
Operating the lease economically meant gaining the right to dredge the Zambezi River so that barges could be used to ship the coal to a bulk materials handling port to be built on the coast at Quelmane.

Several factors seem to have operated to frustrated Rio’s work:

– delicate relations between Mozambique and neighbour Malawi that depends on back
flows from the Zambezi to support some of its food production;

– close relations between Brazilian coal mining company Vale and the Mozambique
government, possibly strengthened by a shared colonial and linguistic heritage;

– copious untied aid from China;

– China’s Export-Import Bank (Exim) agreeing to invest USD2.3bn in construction of
the 1300-MW Mphanda Nikuwa hydroelectric project; and,

– the discovery that Rio’s coal reserves comprised less high grade coking coal and
rather more high ash bearing coal than originally expected

In the end Vale ‘got the gig’, their plan to rail freight coal through neighbouring Malawi prevailing and being tied to the importance of maintaining sufficient environmental flow in the Zambezi to support Malawi’s agriculture. Dredging would, understandably have lowered flows and increased discharge velocities.

The social and environmental concerns of Justiça Ambiental
Yet other concerns remain and de Krester offers Daniel Ribeiro, from environmental justice group Justiça Ambiental as a source.

According to Ribeiro.

The reason why the barging plan didn’t go forward is because you have two big sectors in this country depending on that river. One is dams, which will prevent transport and transport will prevent dams, so you have two big sides of the government, one pushing dams and money from hydro power and you have the coal sector and you have big influences in both sectors so it ends up being okay, whichever interest is the biggest,

Ayesha de Krester also observes that,  Since 2003, the World Bank, the European Bank, the Nordic Bank and African Bank had all considered the proposal, previously named Mepanda Uncua, but ultimately none could consent on environmental grounds given fears it would irreversibly damage the Zambezi’s flow.

Although Rio Tinto’s failure has left them with USD3bn written off the project’s value, I’m drawn to consider the situation of the rural peasantry who depend on the Zambezi continuing to have environmental flows.

This video, Every River has a Story, provides an excellent foundation for understanding the importance of the Zambezi to the rural people of Mozambique and Malawi.

Justiça Ambiental has a Facebook presence. It‘s mission is to engender a culture of civil action in Mozambique both through actions to protect the environment, and by actively engaging in developmental decisions pertaining to issues of environmental justice, here in Mozambique and throughout the rest of the world.

While people like Daniel Ribeiro might be concerned about the environmental flows in the Zambezi, others are not quite so worried and by implication have less concern for a triple bottom line approach. There seems little overt desire to temper the impacts of growth in the energy and mining sectors with concerns for traditional society and the environment.

Sold Down a River is just the beginning of the story
On reading ‘Sold Down a River’, I was left with the impression that the Mozambique and Malawian governments might have been genuinely concerned about the impact of dredging on the lifestyles and traditional economies of the Zambezi catchment. Now after just a small amount of Internet research, I’m not so sure.

It seems that for Malawi, concerns about dredging are more about where rather than if. In July last year,  Malawi’s Nyasa Times cited Radio Mozambique as the source of a report that Six companies have submitted bids to draw up a viability study of the Malawian proposal to open the Zambezi and Shire rivers to international shipping . . . connecting the port of Nsanje to the sea.

Six companies have submitted bids to draw up a viability study of the Malawian proposal to open the Zambezi and Shire rivers to international shipping

According to the same report the . . . Mozambican government is worried about the impact of possible spills or collisions on the Zambezi eco-system, a concern cited as lying at the base of their refusal to give Rio Tinto the go ahead.

I’m left wondering about all of this. The Mozambique government certainly doesn’t seem as certain about the environmental impact of another Hydroelectric power dam. Whatever the real politic, this is by no means a transparent affair. Things remain decidedly turbid.

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