Mário Deus, Director, Gondwana

Gondwana focus on Mozambique’s oil and gas potential as mining suffers.

We last met with Gondwana in 2014; please give us a brief update about Gondwana’s operations of the past two years?

Mario Deus (MD): Gondwana has managed to remain viable despite the slowdown in the mining industry.  Besides the slowing down in mineral exploration worldwide, Mozambique has been affected in the last couple of years by an electoral period, challenges in electoral results, changes in legislation and a new Government. Investors like stability and certainties and the present situation has affected investors, who are somehow holding on to see what will happen next. Most of exploration projects that were already underway are still in execution, but new ventures are at a standstill. Surface taxes have risen seven fold and that is being reluctantly received by the industry. Our main focus has been coal over the years, but we have lately been involved with graphite, iron, marble and some alluvial exploration in Tete, Cabo Delgado, Manica and Nampula Provinces. We have been fortunate with long standing clients like Vale and Baobab Resources.

How would you compare the available information and geographical mapping of Mozambique to some of its Southern African neighbours?

MD: I believe Mozambique has made significant advances in recent years. The information that has been made available (geological, geophysical, geochemical, etc.) gives geologists a good base on how to select areas. We would like to see the information that has been gathered over the last nine years by different exploration companies complied into one database.

We know there has been a decrease in exploration licenses, but what incentives remain specific to Mozambique for attracting new exploration activity?

MD: There has been a political situation that has deterred investment, but I hear things may change. Gondwana believes oil and gas will be the main focus for foreign investment in Mozambique with the large discoveries that have been made recently. The coal industry here still isn’t mature and has quite some way to go. Complementary thinking on the infrastructure issues, operational costs both in the mining operations and in the transport system, the use of lower quality steam coal must all be a continuos challenge for the operators and for the Mozambican Government. Gondwana is gearing up to provide services to the oil and gas sector.

With the focus on mineral diversification across Africa due to the commodity crises and the effect it has had on coal and iron ore in Mozambique, what are the most prospective sectors for diversification?

MD: Mozambique is very dependent on foreign investment and facilitating this is important. There were major influxes of investment when coal was very attractive and the same is happening with oil and gas, or even at a smaller scale, with graphite. Mozambique has plenty of unexplored ground and there are still great opportunities to discover new mineral deposits. We see a good potential for construction materials as the market is growing. Gondwana, being a local company, is interested in local development; hence we look for these new opportunities too.

Given the challenges that the commodity crises has brought, what is Gondwana doing to remain the consultant of choice?

MD: Gondwana’s structure, reliability and extremely good knowledge of the country puts us in a unique position. We have prepared ourselves for this down turn through other investments and we believe Mozambique will be in a good position once the new cycle starts.

What changes do you expect to see in Gondwana over the next two to three years?

MD: The sort of depression the commodity market is going through will somehow prune who is in the market. The ones that will resist will come back stronger as soon the new cycle gets underway. We are now involved in the environmental side and would like to develop our activities in that sort of market, and at this moment, we are more concentrated in hydrocarbon pollution. The oil and gas sector is a new field and we will not be shy to get associated with international consultants and service providers that will be prepared to share opportunities.

Do you have a final message to our international readership that is looking to enter Mozambique?

MD: Mozambique is being looked upon favourably for the oil and gas reserves that have been found. The country is full of opportunities in diverse sectors. With the LNG projects coming online and with more investments in infrastructure Mozambique is well positioned for growth. In the mining sector, I would say we are still crawling, but where were we one decade ago? The country has changed.

This interview was part of research being conducted by GBR for its Mining in Africa Country Investment Guide (MACIG) 2017. The 2016 edition of MACIG was published in February and can be accessed here. The GBR team is currently in Mozambique conducting the necessary research and interviews for the mining and oil & gas sectors. To participate in this report, please contact Molly Concannon at mconcannon@gbreports.com or +258 82 559 4115.