Rio Tinto resumes coal transportation in Mozambique - CNBC Africa

Rio Tinto resumes coal transportation in Mozambique


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Increased risk in coal transportation using Mozambique’s Sena railway line to the port of Biera has also dampened investor confidence in the country.

“The situation in Mozambique is and was dynamic and when it came to analysis, of course the priority was to avert any risk. Some companies have taken decisions in that respect,” Control Risk senior risk analyst Markus Weimer told CNBC Africa on Friday. 

“Of course when you have threats as issued by Renamo they have to be taken seriously. I think when you look at the underlying factors, some companies for example did not interrupt their traffic and others are using the convoys along the roads set up by government.”

Tensions between the Mozambican National Resistance (Renamo) and the Mozambique Liberation Front (Frelimo) began earlier this year after accusations of Frelimo having a tight grip over the county’s politics and economy.

According to Weimer, the positioning of Renamo taps into the sentiment of many Mozambicans regarding democracy in the country.

While the vast majority will not agree with the political party’s current threat methods, some of the underlying messages of democracy in Mozambique and the relationship of power has some resonance.

There is however a political will in the country between government and Renamo to resolve the situation without too much damage to the overall coal exportation.

 “The impact of the situation is much greater when it comes to the reputation of Mozambique as a business destination. This sort of thing raises doubts in investors as to whether this is the right country to invest in,” said Weimer.

I believe that it is the right country to invest in and I think that this situation is being overcome and can be overcome, but investors who look at this case more cursorily without really delving into the depths might be put off.”