[civsoc-mw] {Disarmed} FW: Mozambique 518 - Vale pulling out means end of coal; Cyclone Eloise - 25Jan2021

Tue Jan 26 20:11:33 CAT 2021

This has great implications for Mw, if not now, in due course, and sh/be watched and taken into consideration for transport policy. D

From: J.Hanlon <j.hanlon at open.ac.uk> 
Sent: 26 January 2021 00:04
To: Dev-Mozambique-List <dev-mozambique-list at open.ac.uk>
Subject: Mozambique 518 - Vale pulling out means end of coal; Cyclone Eloise - 25Jan2021

518 - 25 January 2021
=========

Editor: Joseph Hanlon (  <mailto:j.hanlon at open.ac.uk> j.hanlon at open.ac.uk)

To subscribe:  tinyurl.com/sub-moz <http://tinyurl.com/sub-moz> 

To unsubscribe:   <http://tinyurl.com/unsub-moz> tinyurl.com/unsub-moz  

Articles may be freely reprinted but please cite the source.
===========================
This newsletter in pdf is on http://bit.ly/Moz-518
Other links, including cyclones and Covid-19, at end of newsletter
=============================
In this issue
End of coal
+ Vale pulling out
+ Coking coal has another decade
+ Where will the rents come from?
Cyclone Eloise
+ Mainly flooding
Response
+ No protest from middle class
======================

Vale pulling out
This is the end of coal

Vale is pulling out of Tete as part of its climate emergency commitment to end coal production. Several announcements last week set out a complex planned withdrawal.

Vale announced on 20 January that to allow the Japanese company Mitsui to leave the project, buying its 15% of the Moatize coal mine and its 50% of the 900 km railway and port facilities Nacala Logistics Corridor, for $1. But it will take on Mitsui's $2.5 bn debt. The new wholly owned company will only mine high quality coking coal, and hopes to mine 15 mn tonnes this year and 18 million tonnes next year. But the announcement stressed that Vale wants to disinvest from all coal production.

On 22 January Reuters reported that Vale has hired Barclays and Standard Chartered to sell the mine, railway and port, probably to China or India. China produces half the world's steel and is anxious to replace Australian coal which has been stopped because of a diplomatic confrontation.

India is the second largest global importer of coal and an Indian ICVL company bought the Rio Tinto mine in Benga in 2014, mainly for coking coal. Another Indian company, Jindal, also has a coal mine in Tete.

To mine coking coal large amounts of cheaper thermal coal must be removed. When these mines opened, the thermal coal could be sold, but now it cannot and will be left in giant piles. Coking coal will have a market for perhaps a decade more.

Why is coking coal still needed?

Coking or metallurgical coal remains essential for steel making. A race is on to develop ways to replace it and production of coal free steel should start in the next five years. So there will remain a market for coking coal for another decade.

Steel-making dates back 2500 years in Anatolia and East Africa, and blast furnaces were developed in China and East Africa. China now produces half of the world's steel. Tanzanian production was stopped by German colonisers who did not want competition with the growing German iron and steel production. 

Initially wood was used, but China began using coal in the 11th century. Coal is converted to "coke" by heating it in low oxygen conditions to drive off water and unwanted chemicals. Coke and iron ore is put into a blast furnace to reduce iron ore (Fe2O3) into pig iron (2Fe). Coking coal enters the process again in the next step of converting iron to steel, when it provides both energy and carbon for the final alloy.

Under rapid development are methods to replace coking coal at both steps. Hydrogen is becoming an important non-carbon industrial fuel, because it can be produced from electricity, and renewable electricity sources are being rapidly development. Iron can be reduced to pig iron through "direct reduction" processes using hydrogen. Electric arc furnaces now produce 30% of the world's steel (mainly from scrap) and do not need coal for energy, and are increasingly used from production of steel from pig iron,  with other sources of the carbon than coking coal. It is predicted that within a decade a coking coal demand will be dropping significantly. But until then, Moatize should have a market for coking coal.

Background: https://leard.frontlineaction.org/coking-coal-steel-production-alternatives/ and https://www.letstalkaboutcoal.co.nz/future-of-coal/making-steel-without-coal/

Comment
As the resource bubble bursts, 
where will the rents come from?

The "resource curse" occurs when global mining and gas companies share the surplus from resource extraction with a small local elite, and little reaches ordinary people. Economists refer to this as "rent" - income derived from ownership or control over a limited asset or resource. Such income is attained without any expenditure or effort on behalf of the resource holder.

Frelimo has developed an elite and a patronage network based on growing resource rents and the vision of a gas bonanza in coming years. But the bubble has burst. Reversing the climate emergency is putting a rapid end to coal, and is capping the promised growth of natural gas. Vale is abandoning Tete and no new mines will open. There will be no railway to Quelimane. Even if Total continues with its current natural gas project, ExxonMobil and others are unlikely to start their parts, because of war and low gas prices. Global heating is causing an energy shift faster than most people - including Frelimo - expected.

Gemstones, gold, graphite and heavy sands will continue, but they do not provide huge rents. Frelimo thinks that its "blue bag" of cash to hand out will be constantly refilled, but Vale is a harsh reminder that time is over. Some hard thinking is needed about how to manage the fall in resource rents. jh

Cyclone Eloise brings flooding

Cyclone Eloise hit Beira and Buzi Saturday morning (23 Jan) with 120 km/h winds. The cyclone passed south-west and is now a tropical storm in South Africa. Six people have been killed.

Heavy rain of more than 200 mm caused the major problems. On Friday afternoon the cyclone skirted the coast of Zambezia, causing flooding in coastal districts from Quelimane to Chinde. Parts of Beira were flooded and electricity and mobile telephone services were cut for a day, but are now back on. The only road into Beira, the N6 from Zimbabwe and Chimoio to Beira, remained open.

Three rivers were already high. Flooding has been exacerbated by the heavy rains from Eloise, and flooding will continue for several more days. From south to north:
Save River on the boundary between Inhambane and Sofala was already 1 metre above flood level on Friday (22 Jan), before Eloise, and some riverside villages are flooded. The only bridge crossing the river, on the N1, is closed for repairs, and a temporary bypass bridge built. It was closed on Friday when a section of the temporary bridge was washed out. Water reached 2 m above flood level yesterday, and continued flooding is predicted. It has been possible to open the old under-repair bridge to a single lane of traffic.
Buzi River has been 2 metres above flood level since Tuesday 19 January and we showed film of the flooding on Wednesday in our previous bulletin on http://bit.ly/BuziFlood1. Buzi is still flooded and the only road access is still under water. The Public works ministry in its daily Boletim Hidrológico Nacional said roads are flooded in the headwaters of the Buzi river in Manica province.
Pungoe River this morning (25 Jan) was 2.7 metres above flood level and some side roads in Nhamatanda district are flooded, but the main N6 is open. Less Eloise rain fell over the Pungoe basin.

In Buza town hundreds of families were evacuated on Thursday because of flooding. In Beira thousnds of people were evacuated from the most flood prone areas and spent Saturday night sleeping in schools. INGD reports that 5082 people were evacuated before Eloise struck. Six people are known to have died, four in Beira when their houses collapsed on top of them, and two in Buzi. So far 2435 houses are known to have been destroyed, and that number will increase.

Elsewhere, the Limpopo River is at flood levels and this could increase with the heavy rains in South Africa from Eloise.

INGC has recently been transformed into the National Institute to Manage Disaster Risk Reduction (Instituto Nacional de Gestao Reducao do Risco de Desastres) - INGD - https://www.facebook.com/INGD.Mocambique/ There is as yet no web page.

INGD and OCHA daily reports and Boletim Hidrológico Naciona are posted on http://bit.ly/Moz-flood21

The EU Copernicus Emergency Management Service has rainfall and flooding forecasting maps on https://www.globalfloods.eu/glofas-forecasting/ or https://www.globalfloods.eu/ and click on Map Viewer.

+ There have been a series of false videos alleged to be Eloise damage, but really a US tornado, Australian hailstones, South Africa in 2013, etc.

Further to a comment, from economist Roberto Tibana
No protest from a middle class
that feeds off the corrupt elite

The Mozambique "middle class" you are talking about in your Comment last week "Will this [Covid-19 explosion] trigger middle class worries?" ( <http://bit.ly/Moz-517> http://bit.ly/Moz-517) is not an entrepreneurial middle class that has stakes in the economy and social stability and abhors corruption. It is one that feeds off the corrupt state. 

Many doctors, teachers, and engineers in Asian and Latin American upper or middle income countries are middle class with stakes and thus motivation and clout to push for change. Here in Mozambique they live on the verge of poverty, not far above the poverty line, and they can easily fall below it. They do not have a "subsistence reserve" to sustain the fight. They are nearly as "hand-to-mouth" as the poor (although not as near to the absolutely poor). 

Most of those far above the poverty line are corrupt themselves, or servants to the corrupt elite. They do not represent the kind of middle class that can challenge the corrupt elite. They see such fight as undesirable and threatening to their short term interests. Many see those taking on the corrupt establishment as an enemy who threatens the favours they get from their corrupt masters. 

I suspect that if any challenge to the corrupt elite will come it will be from the very bottom, when those people who really have nothing to lose (including their own lives!) say: enough is enough! The problem with that is that there will be a dangerous leadership vacuum, no leaders to channel their forces in a constructive direction.

The Pandemic is driving the tolerance of those at the bottom to the breaking point. On the day following the announcement earlier this month of new measures to tighten prevention, there was rioting in Manhica district, Maputo province. Protesters burned tyres and said they could not take it any more. They wanted to earn their livelihoods; they said the preferred to die of Covid-19 rather than from hunger sitting at home. The demonstration was quickly crushed. But I am not sure this will always be the case. Certainly it could not be sustained when the government fails to pay police salaries. 

To enforce Covid-19 restrictions on 15 January, a brutal and poorly educated police force was unleashed to grab vendors' goods, particularly alcohol, in the "barracas" (informal market stalls) while beating the owners. I know cases where people paid more than equivalent of $1000 to be taken into the police force. It is a business being in the police force. They would not use that money to pay school fees for their own skills training for other types of occupations. This is known at the highest levels of the command chain. The returns are higher as a policeman/women, not only for the rank-and-file but also for the commanders above them. 

But for how long can they deliberately turn the police against the citizens in such a barbaric manner? One day there is going to be nothing in the "barracas" for the police to take. That day will be the day of reckoning for all.   RJT

=========================================
Important external links
Cabo Delgado civil war:
   Cabo Ligado weekly report  http://bit.ly/CaboLigado
   War reports, detailed maps, census data - http://bit.ly/Moz-CDg
Covid-19 daily updated data https://www.facebook.com/miguel.de.brito1
   and https://covid19.ins.gov.mz/documentos-em-pdf/boletins-diarios/
Daily flood reports - http://bit.ly/Moz-flood21
Cyclone trackers, https://www.cyclocane.com/ and https://www.metoc.navy.mil/jtwc/jtwc.html
J Hanlon downloadable books: http://bit.ly/Hanlon-books 
   "Chickens & Beer: A recipe for agricultural Growth": https://bit.ly/Chickens-Beer
Data on all Mozambique elections: http://bit.ly/MozElData

Previous editions of this newsletter, in pdf: http://bit.ly/MozNews2021 and bit.ly/MozNews2020 <x-msg://8/bit.ly/MozNews2020> , which contain many more links
=========================================
ARTICLES MAY BE FREELY REPRINTED but please cite the source: "Mozambique News Reports and Clippings".   Previous newsletters are in my archive on http://bit.ly/Mozamb
=========================================

If you have received this from a dev-mozambique list, you have voluntarily subscribed. We hold only your e-mail address and never share our subscription list with anyone.
To unsubscribe: tinyurl.com/unsub-moz <x-msg://8/tinyurl.com/unsub-moz> 
=========================================

This mailing is the personal responsibility of Joseph Hanlon, and does not necessarily represent the views of the Open University.

-- The Open University is incorporated by Royal Charter (RC 000391), an exempt charity in England & Wales and a charity registered in Scotland (SC 038302). The Open University is authorised and regulated by the Financial Conduct Authority in relation to its secondary activity of credit broking. 

-- 
This message has been scanned for viruses and
dangerous content by MailScanner, and is
believed to be clean.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://chambo3.sdnp.org.mw/pipermail/civsoc-mw/attachments/20210126/ffe04a42/attachment-0001.htm>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: -logo Moz-e-mail.png
Type: image/png
Size: 55431 bytes
Desc: not available
URL: <http://chambo3.sdnp.org.mw/pipermail/civsoc-mw/attachments/20210126/ffe04a42/attachment-0001.png>