Mozambique government cancels contract with Procana

4 January 2010

Maputo, Mozambique, 4 Jan – The Mozambican government has cancelled a contract signed in 2007 with Procana to produce ethanol from sugarcane, Mozambique’s AIM news agency reported on Monday.

Procana’s initial investor was the London-based Central African Mining and Exploration Co. Last August the latter created Bioenergy Africa, which received 94 percent of Procana’s shares.
Bioenergy African subsequently changed its name to Sable Mining and is registered in the British Virgin Islands, a tax haven in the Caribbean.

Under terms of the contract, Procana was to have invested more than US$500 million in the project – the first to produce biofuels in Mozambique.
The Massangir unit is meant to produce both sugar and ethanol, with waste recycled for both fertiliser and energy production.

The contract was declared null because Procana failed to meet its contract obligations and only cleared 800 hectares of terrain out of a total of 30,000 hectares, said the deputy education minister and Council of Ministers spokesman, Luis Covane. (macauhub)