The Mozambican government predicts that extractive industries will make the biggest contribution to the growth of Gross Domestic Product (GDP) in 2023, according to the State Budget proposal sent to parliament.
In the average of 14 sectors, the government foresees that the Mozambican economy will grow 5% next year, with the largest contribution in the forecasts being that of the extractive sector, with a growth of 23.1%.
The sector with the lowest contribution is expected to be trade, with 2.3%.
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The extractive sector was already at the top in 2021, when it contributed with 10.7% growth for the Mozambican GDP to advance 3.6% overall (that is, the average growth of all sectors).
Now, it is expected that this leading position will be even larger.
“The extractive industry’s production plan for 2023 provides for a global growth of 23.1%, supported by increased production of rubies, coal, heavy sands (ilmenite, zircon and rutile), natural gas and building materials,” the State Budget proposal reads.
Gold production is expected to rise by 23% (to 1.3 tonnes) compared to projections for 2022.
In terms of heavy sands (important for new industrial applications and electronic devices) new concessions will be launched, including the largest in the country, due to the increase in world demand for ilmenite pigment.
With regard to graphite, with large reserves in Cabo Delgado to be exported for batteries for new electric cars, projections point to “a growth in production in the order of 48% to 270,000 tons”.
In the field of ruby mining, “production is estimated to increase by 186%, representing 12.6 million carats”, according to the draft.
Coal production will continue to rise, due to the global energy crisis, with the increase in production reaching 28% and the export of liquefied natural gas from Rovuma starting in the coming weeks.
Of the three liquefied natural gas projects approved for the northern region of Mozambique, the Coral Sul platform, in the open sea, far from armed violence in Cabo Delgado, will lead the exports from reserves that are listed among the largest in the world.
The platform led by Italian oil company Eni will produce 3.4 million tonnes per year.
Gas has already started to be processed on the platform, awaiting the filling of the first tanker ship from BP, which bought the production for 20 years.
The 2023 State Budget proposal justifies the optimism for the extractive sector, saying, “gradually, the international market appears to be open to trade in mineral resources and companies in the mining area have been resuming the normal pace of production”, resulting from the adaptation to a new reality.
There are also mitigation measures “aimed at reducing the negative impacts of the pandemic shock and the repercussions of the Russia-Ukraine conflict on global supply chains”.
“Thus, there is an increase in the production of minerals with great weight in the global structure, namely gold, heavy sands, graphite, ruby and coal,” the proposal concludes.
The State Budget and plan for 2023 are expected to be discussed by the Mozambican parliament before the end of the current session in mid-December.