New prospects for Mozambique gas.

Author:Dhliwayo, Dominic
Position:JCI and Atlantic Richfield Co. joint venture

The recent joint venture between JCI and an American oil and gas company could provide the much needed market for gas from Mozambique's Manica province and at the same time give an impetus to the region's iron and steel industry.

The recently announced joint venture between the South African mining house, JCI, and the Texas-based oil and gas company, Atlantic Richfield Co (ARCO), to build a $650m iron reduction plant in Mozambique's Manica province is the latest manifestation of a number of attempts by multinational gas companies to find a market for the country's gas reserves. If the plant is successfully implemented it will generate 2m tonnes of reduced iron per year for export to the Middle and Far East markets and will use 2.8m tonnes of Zimbabwean iron ore.

The plant was conceived as a means of providing an anchor client for the 0.85 trillion cubic feet (TCF) Temane gas field. Zarara Petroleum, a United Arab Emirates concern, have entered the project as a minor partner and hold the concession for the field. The two hydrocarbons companies are confident of finding further gas deposits and will attempt to sell surplus production to the Zimbabwean industry through the border town of Mutare. Gas will be carried to the proposed site of the plant and to Mutare through a 450km pipeline which ARCO intends to build from Temane, 450km to the south.

Ore will be brought from deposits controlled by Zimbabwe's Buchwa Iron Mining Company (BIMCO) from the east and south of the central town of KweKwe and along the mineral rich Great Dyke, which runs down the centre of the country. JCI will have to build a 180km railway to transport the ore and has signed a memorandum of understanding with BIMCO to further evaluate the deposits. Mozambican ore deposits were also considered but were deemed inadequate in terms of quantity and quality: A deposit of 70m to 100m tonnes is required to give the project a 20 to 25-year life-span. The final project, hot briquetted iron (which serves as furnace feed for electric arc steel-making furnaces) is to be transported to Beira along the existing Beira Corridor route. If all goes to plan the final feasibility studies will be completed by the end of next year and construction will begin in early 1998. The commissioning date is expected to fall around mid-2000, which is important because it is thought to be an opportune moment to enter the rapidly expanding market for this commodity. Although plans for the new project have...

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