Mozambique's natural resources
Mozambique, located on the southeastern coast of Africa, is endowed with abundant natural resources that present significant opportunities for economic development. The country's wealth includes large reserves of natural gas, coal, and potential oil deposits, although oil production has yet to commence as of 2024. Historically, Mozambique's economy has relied heavily on services, agriculture, and industry, with exports comprising aluminum, natural gas, cotton, sugar, and tobacco.
The energy landscape in Mozambique is largely dominated by hydropower, accounting for over 80% of electricity generation, notably from the Cahora Bassa Dam, a crucial energy source for both the nation and the wider southern African region. Despite being a net exporter of electricity, the country faces challenges in providing universal access; as of 2024, only about 51% of the population had electricity access. Recognizing the need for improvement, Mozambique aims to enhance its renewable energy output and expand its electricity grid by 2030, investing significantly in solar, wind, and biomass resources.
While natural gas is currently the most developed resource, with significant exports primarily to South Africa, coal production is also expected to rise, although logistical constraints have hindered this growth. Mozambique's future energy strategy focuses on a balanced mix of renewable energy and natural gas, indicating a commitment to both economic development and environmental sustainability.
Mozambique's natural resources
Official Name: Republic of Mozambique.
Summary: Mozambique is an African country, rich in natural resources, that is in the process of developing, diversifying, and expanding its energy mix.
Mozambique is located on the southeastern coast of Africa and is bordered by six countries: Zambia, Malawi, Tanzania, Zimbabwe, Swaziland, and South Africa. Its population is more than 35 million people, of which around 45 percent are below 15 years of age.
Mozambique became independent from Portugal in 1975, following 16 years of civil war that caused extensive damage and hampered the nation’s development. In 2017, the country was dependent mainly on services—which made up more than 56 percent of the gross domestic product (GDP)—along with agriculture and industry. Exports include aluminum, natural gas, cotton, sugar, and tobacco. The richness of the country’s natural resources, which is yet to be fully explored, and the geographical location of Mozambique are deemed to offer ample opportunities for investment. Presumably, this will allow the nation to develop in both economic and social terms.
However, there are those who believe that the economy is vulnerable, in the long run, to this resource abundance, particularly if Mozambique starts to produce oil. This phenomenon is often called the "paradox of plenty" and is based on the fact that many countries rich in resources that indeed explore their natural wealth are among the poorest nations in the world. Currently, in the energy spectrum, although oil has not been extracted, Mozambique produces gas and coal. It has very large proved reserves of natural gas, with the potential to develop facilities to make the country a leading exporter of liquified natural gas (LNG). It also produces and exports electricity; in fact, Mozambique is a net energy exporter.
In Mozambique, the majority of internal energy needs are met by hydroelectricity which generated more than 80 percent of the energy for electricity. Electricity is deemed to be crucial to improve the population’s welfare and make certain investments relevant to economic growth. Mozambique has seen significant growth in the electrification rate, although as of 2024 only around 51 percent of the population had access to electricity.
Electricity Production and the Use of Renewable Sources
In Mozambique, the majority of electricity supplied from the national grid comes from hydropower, although there is also thermal production from diesel or natural gas. In 2022, about 2.77 million kilowatt-hours of electricity was produced in Mozambique while consumption was 13.09 billion kilowatt-hours.
The Cahora Bassa Dam on the Zambezi River, in the Tete Province, with an installed capacity of 2.075 megawatts, is a major source of electricity for both Mozambique and southern Africa as a whole. The erection of the Cahora Bassa Dam created one of Africa’s largest artificial lakes. This dam was fully operational in 1979, although during the Mozambican Civil War (1977–92) the transmission lines to South Africa were destroyed. This dam was not transferred to Mozambique, both because of the civil war and because of unpaid debts. In 2007, however, the national government assumed control of it.
In 2022, a majority of the country’s electricity production, about 11 billion kilowatt-hours, was exported. Imports were approximately 8.219 billion kilowatt-hours in 2022. Hence, Mozambique is a net electricity exporter. However, there are many localities with no electricity, which emphasizes the importance of both the intensification of the electricity grid and adoption of other solutions, particularly decentralized production from renewable sources. Both the government and the private sector are interested in developing use of solar, wind, and biomass energy resources. In the Just Energy Transition Plan, released in 2024, Mozambique set a goal of further increasing its renewable energy generation capacity and reaching the goal of universal access to electricity by 2030. Also by 2030, the country planned to invest $80 billion of public and private funds into transitioning to a combination of renewable energy and natural gas.
Oil and Oil Products
Oil was not produced in Mozambique as of 2024, but surveys indicated the strong possibility of both offshore and onshore oil deposits, and the presence of this resource has been detected. However, the availability of oil reserves in quantities that justify economic exploitation was being researched. Several international companies were participating in prospecting activities.
The refined petroleum products currently used in the country—equivalent to around 40,000 barrels per day in 2022—were mainly for transportation and industry and were imported.
Natural Gas
Exploration for natural gas started in 2004. Mozambique has large sedimentary basins of natural gas, many of which have not been developed. New gas deposits have been discovered, and the total proved reserves were estimated at over 2.8 trillion cubic meters in 2021. Of the country’s annual production of around 5.338 billion cubic meters (2022 estimate), about 3.963 billion cubic meters was exported, mostly to South Africa by pipeline. The remaining amount was used in the country mainly in industries, including the electricity industry.
Coal
There are several large deposits of coal in the Tete Province. Coal has been produced in the region, in the Moatize mines, since 1940, but it was suspended in 1981 because of the civil war. However, operations were restarted at that mine and others, and significant production was expected. The vast majority of the coal produced in Mozambique has been consumed internally, but with several new projects, Mozambique is expected to export significant amounts of coal. However, transportation issues from the inland mines and limitations at port facilities have suppressed this potential to a large degree. The country's coal exports stood at 5,103 short tons in 2014, out of 10,031 short tons of total production.
Increased electrification through the use of decentralized electricity production, the eventual exploration for oil, development and increased export of gas, the start-up of coal projects, and even the development of biofuel production and use of natural gas in transportation—all these are expected in Mozambique in the near future and will eventually lead to significant changes in the country extending beyond its energy sector.
Bibliography
Bucuane, Aurélio, and Peter Mulder. Exploring Natural Resources in Mozambique. Mozambique: Direcção Nacional de Estudos e Análise de Políticas, Ministério da Planificação e Desenvolvimento, 2007.
Chambal, Hélder. Energy Security in Mozambique. Policy Report 3. Canada: International Institute for Sustainable Development, 2010.
"Mozambique." The World Factbook, Central Intelligence Administration, 30 July 2024, www.cia.gov/the-world-factbook/countries/mozambique/#energy. Accessed 6 Aug. 2024.
"Mozambique, Market Overview." International Trade Administration, 13 Mar. 2024, www.trade.gov/country-commercial-guides/mozambique-market-overview. Accessed 6 Aug. 2024.
"Mozambique Publishes Just Energy Transition Strategy." GET.transform, 27 Mar. 2024, www.get-transform.eu/mozambique-publishes-just-energy-transition-strategy/. Accessed 6 Aug. 2024.