Africa’s biggest project takes shape … under the cloud of terrorism in SADC

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Dozens of soldiers clutching AK-47s and grenade launchers watch over roaring bulldozers on the white sand beach that meets a tropical turquoise sea.

They’re guarding Africa’s biggest investment: a US$23 billion project to export Mozambique’s natural gas from an area increasingly besieged by an Islamist insurgency.

Companies led by Total SA will pump the gas from wells about 40km offshore, cool it to temperatures below -162 degrees Celsius so that it turns to liquid, then ship it to electricity plants from France to China.

The consortium is about to finalise almost US$16 billion in project financing — another record for the continent.

“The work is immense,” said Ronan Bescond, the 44-year-old French chemical engineer who Total chose to lead the project after a career of nearly two decades at the company. “The first cargo of LNG must be in 2024. And we are on the right track,” he said to a handful of reporters in a prefabricated room at the site 32km south of the Rovuma River that marks the border with Tanzania.

The obstacles facing a project are huge.

To achieve the target of first production, developers need to move thousands of tonnes of equipment through territory thick with Islamic State-aligned insurgents. At one stage, a COVID-19 outbreak saw the Total site accounting for three in four of the country’s confirmed infections.

All this as natural-gas prices plunged to near 25-year lows.

Militants who first pledged allegiance to IS in 2018 have carried out increasingly brazen attacks this year.

Last week, they raided Mocimboa da Praia for a third time, and occupied the town for as long as three days. It’s a crucial supply hub just 60km south of the project site and the closest port.

As many as nine workers for Total subcontractors Fenix Construction Services Lda died in the attack, Jasmine Opperman, an African analyst at Wisconsin-based Armed Conflict Location & Event Data Project, said in a Twitter post. The company didn’t answer seven calls and two emails seeking comment.

Before the gas discoveries and insurgency, the remote coastline was more famous for luxury tropical island resorts. Last month, one of the nearby hotels offered a discount price of US$19,820 a night to hire out an island as a refuge from the coronavirus.

The private military company that Mozambique hired in April to provide air support to government troops in the form of helicopters fitted with machine guns has struggled to quell the violence. Lionel Dyck, the founder of Dyck Advisory Group, the firm the government employed, declined to comment when contacted by mobile phone.

Governments including South Africa, the US and Portugal have indicated willingness to help fight the insurgency.

“The insurgency is a challenge but we’re happy that our defence and security forces have been playing their role,” Max Tonela, Mozambique’s Energy and Natural Resources Minister, told reporters during the June 19 site visit. “We all as Mozambicans must fight against this evil that comes from external attacks.”

About 1,300 people have died in the violence, with a further 220,000 displaced since the first attack three years ago, which also took place at Mocimboa da Praia.

For the second time, IS referred directly to the projects in a weekly newsletter this month. The group said that it would be “delusional” to think that the government could protect the investments, and warned other countries against getting involved.

The marginalisation of young men in a region that’s predominantly Muslim and 1,900km away from the capital, Maputo, has helped lead to radicalisation that’s fuelled the insurgency, according to researchers including Saide Habibe at the Maputo-based Institute of Social and Economic Studies, who have studied the origins of the fighters.

Total’s project will hire 14,000 people at peak construction, of which at least 5,000 will be Mozambican and many from the region, Bescond said at the briefing, wearing a surgical mask, as all visitors to the site must do to prevent the spread of coronavirus.

The financial rewards are worth the cost to the government of the soldiers patrolling the vast compound and snipers on its perimetre fence — Total’s estimate is US$50 billion in direct and indirect revenue over 25 years for the US$15 billion economy. – BizNews

 

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