Cement production in Mozambique to triple through Chinese investment

30 May 2011

London, United Kingdom, 30 May – Several cement factory projects are being launched in Mozambique, including three from Chinese companies, which will make it possible to triple cement production in the country in just two years, according to the Economist Intelligence Unit (EIU), of The Economist group.

According to the EIU in its most recent report on Mozambique, expansion of cement production capacity is intended to cover growth in demand from the construction market in Mozambique, with large mining, energy and construction projects as the main sources of demand.

The three Chinese companies plan to build plants in the province of Maputo that will start operating as of next year.

Magude is the location chosen by Africa Great Wall Cement Manufacturer for a cement plant with annual production capacity of 500,000 tons, costing US$78 million.

The China International Fund’s plant near Salamanga, south of Maputo and costing around UIS$72 million, is already under construction.

Estimated production stands at 800,000 tons per year, whilst a third unit, owned by GS Cimento, will have capacity to produce 550,000 tons of Portland cement per year.

This factory will be located in the Boane industrial park next to the Mozal aluminium factory. It is the most expensive of the three Chinese factories, and is expected to cost US$100 million.

Also according to the EIU, a fourth Chinese company, Bill Wood, is interested in building a cement factory in Cheringoma district, the second of its kind in Sofala province.

Of all the planned investments, the biggest is from South Africa’s Pretoria Portland Cement, expected to cost US$200 million for a plant with capacity to produce 600,000 tons of cement per year.

If all the projects go ahead as planned, the country’s cement production will triple by 2013, to 4 million tons per year, according to the EIU, at a time when demand is rapidly growing.

Current production is estimated to be 1.3 million tons and the biggest slice of this is produced by Cimentos de Moçambique, of Portuguese group Cimpor, which has a capacity of almost 700,000 tons per year.

Demand is increasing due to many investments in infrastructure across the country.

One of the latest, according to the EIU, is Nacala international airport, in Nampula province, which is the result of converting a previous military airbase.

Construction is in the hands of Brazilian company Odebrecht and the airport is due to be ready at the beginning of 2012.

“The project is the most recent of several public airport infrastructure investments including the reconfiguration of Maputo international airport and the international airports in Pemba and Vilanculos, the latter two being important centres for the tourism industry,” the report said.

Another sector that is expanding is the mining sector, a new player in which is Beacon Hill which recently paid US$42 million for the assets of US company Global Mineral and Metals in Moatize, Tete province, which has estimated coal reserves of 450 million tons.

In April, another British company, Pan African Resources, was awarded a gold mining license in Manica, which is the historical gold mining centre of Mozambique.

The EIU for this year points to growth of the Mozambican economy of 7.3 percent, which is an increase of 0.8 percentage points on last year.

GDP growth is expected to increase next year to around 7.5 percent, the EIU said. (macauhub)