Price of raw materials leads to closure of companies in Mozambique

22 August 2016

Three mining companies have closed in Nampula province, northern Mozambique, due to the economic and financial crisis facing the country and the drop in the price of minerals on the international market, said the provincial director of the sector.

Olavo Daniasse, provincial director of Mineral Resources and Energy of Nampula, said a fourth mining company will reduce activity from September, with all of them arguing that production costs continue to grow and sales are not offsetting that.

One of the mining companies which has closed is Indian-owned Damodar Ferro Lda, and there are others struggling, including China’s Hayiu Mining Company, which despite being in a difficult situation has not yet announced the dismissal of workers, according to the Mozambican press.

Further south, in Zambezia province, the economic and financial crisis and political and military tension led to the closure of 88 companies in Zambezia province and the consequent dismissal of 319 workers.

Eugénio Selemane, of the Provincial of the Organization of Mozambican Workers Secretariat, told the Morning News, Maputo, that the sectors most affected by the redundancies are construction, industry, trade, bakery and transport, mainly in the districts of Quelimane, Mocuba, Milange Gurué and Alto Molócuè, regions that have some economic activity.

In the neighbouring province of Tete workers have been dismissed in much larger number, about 4,000, but for reasons linked to the fall in the price of coal, the main product exported to international markets.

Vale Moçambique, a subsidiary of Brazilian group Vale, was the company that fired most Mozambican workers, with 2,348 of the 3,937 jobs lost.

In the same period the company fired 520 foreign workers, of a total of 535 involved in coal mining throughout the province, according to the head of the Department of Mineral Resources of the Tete Provincial Directorate of Mineral and Energy Resources, Protásio Aurelius. (macauhub/MZ)