Japan Eyes Access to Mozambique's Mineral Resources with $672 Million Loan

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Japan's 70 billion yen (US$672 million) loan package to Mozambique is aimed in part at gaining access to the country's rich gas and coal reserves.

Mozambique was Japanese Prime Minister Shinzo Abe's first stop on his current African tour, which includes Ethiopia and Cote d'Ivoire.

Talks between Abe and Mozambique's President Armando Guebuza were followed by the announcement of Japan's five-year loan package to the southeast African country. The package will help Mozambique develop its infrastructure, agriculture, health and power.

This will give Japan a presence in the economic fabric of the country and a base from which to gain stakes in the rich resource potential of the country. Abe said that the loan package was aimed at "securing access to the vast mineral resources Mozambique boasts--namely gas and coal, as well as agriculture products."

A significant portion of the loans will be invested in improving the quality of the road system in Mozambique's northern development corridor, which connects the port of Ncala, through Nampula and Niassa provinces, to the Malawian border.

Mozambique is aiming to ship its first LNG cargo from the offshore gas project being developed by Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas) and Mitsui & Company (OTC:MITSY) (Tokyo, Japan). To date, 150 trillion cubic feet of natural gas have been discovered offshore. Mozambique has vast, unexploited coal reserves, which will become exportable as the transport infrastructure improves.

Japan and Mozambique jointly announced that the new partnership would be known as the Japan-Mozambique Initiative for Revitalizing and Accelerating Development (AMIZADE).

For related information, see January 10, 2013, article - Anadarko Awards Fluor/JGC Joint Venture LNG Onshore FEED Contract.

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