Mozambique and Japan to work together in oil and coal sectors

30 October 2012

The governments of Mozambique and Japan Monday in Maputo signed several cooperation agreements for the oil and coal sectors involving state and private companies from both countries, the Mozambican press reported.

Signed as part of a visit to Mozambique by the Japanese Minister of State for the Economy, Trade and Industry, Isao Matsumiya, the agreements involve Mozambique’s National Oil Institute and Mozambican mining company Empresa Moçambicana de Exploração Mineira and Japan Oil, Gas and Metals National Corporation (JOGMEC).

The Japanese government also pledged to train Mozambican staff in these sectors and to invest in developing infrastructure in Mozambique.

Reporting on Isao Matsumiya’s trip, Japanese newspaper Yomiuri Shimbun said that the Japanese government planned quickly to reach an agreement with its Mozambican counterpart so that coal mined in the African country can be exported to Japan at the end of 2014.

The newspaper added that this agreement was intended to help Japanese steel makers to ensure a stable source of coking coal, the price of which is on the increase due to demand from China, and to buy thermal coal to feed power plants at a lower cost.

Specifically the agreement would allow Nippon Steel and Sumitomo Metal Corp to be granted coal exploration rights in Mozambique, which will be the first time that a Japanese company would have these rights in Africa.

Japan buys most of its coal from Australia but the contracted prices, which were around US$50 per ton until 2004, now stand at US$200 per ton due to high demand from Chinese companies.

Yomiuri Shimbun added that the agreement with Mozambique would guarantee 2 million tons of coal per year, or around 10 percent of what Japan’s steel making industry consumes each year. (macauhub)