Mozambique: Macanga gold mine exports 20 – 30kg gold monthly to Dubai – director

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Mozambique: Macanga gold mine exports 20 – 30kg gold monthly to Dubai – director

11:00 CAT | 09 Oct 2020

FILE - For illustration purposes only. [File photo: enews]

The Mozambican gold that is bought in jewellery shops in Dubai reaches the Middle East after overcoming voracious illegal mining and flooding, in Macanga district, 1,600 kilometres from Maputo.

Mozambique Mining Resources (MMC) – a joint venture between Mozambican and Chinese investors – extracts gold from the only active underground mine in the country with galleries between 120 and 160 metres deep and where it is normal to find “intruders”.

“The illegal miners were and are a strong threat to our activity. Besides having a nose for gold, because they have excellent knowledge of geology – they are even ’empirical geologists’ – they use techniques that are harmful to the environment,” Dingane Mamadhussen, MMC’s managing director, tells Lusa.

Shortly after the company began operations in late 2018, it had to stop because the mountain covering one of the galleries threatened to collapse due to erosion caused by illegal mining.

To prevent the collapse, a lot of mortar was placed at the foot of the mountain and it was thus possible to continue the operation.

Security at the mine is tight: a combined force of the Mozambican police and a private company guarantee the protection of the facilities to prevent the precious ore from getting into improper hands.

Then, as the company prepared to operate at full capacity in March 2019, came cyclone Idai and the floods that accompanied it in central Mozambique.

“Where the company was looking for raw gold, it only picked up floods, we had to stop for about four months,” he recalls.

The scenario could be repeated in the rainy season that in Mozambique starts in October and ends in the first quarter of the following year.

In any case, “the trade war between China and the US” and the Covid-19 pandemic have a positive side for MMC, because many investors started to look for gold as a reserve for their savings, pushing up the price.

The raw gold from the Macanga mine arrives in Dubai on private jets at just over 2.6 million meticais (€30,500) a kilo.

“Before the trade war, we sold between 1.9 and 2.4 million meticais [€22,300 – 28,200] a kilo”.

For the gold traders, this is the best season and MMC wastes no time in putting in Dubai the 20 to 30 kilos that it extracts monthly from Macanga.

The good time is mitigated by rising costs due to restrictions imposed by the pandemic, laments Mamadhussen.

He has no doubts: it is better to give gold to the United Arab Emirates on private jets than to pass it from hand to hand, from illegal prospectors, because it may end up financing illegal activities, including terrorism.

“The naked, drenched man who does the mining is only the weakest link in an entire chain. The gold ends up in the hands of men in suits and ties who are engaged in activities that are not recommended,” he says.

The Mozambican and Chinese partners have invested $40 million (€34 million) in heavy machinery to mine gold in Macanga and directly employ 300 workers and 400 indirect ones.

Speaking to journalists at the end of a visit to the mine on Wednesday, Max Tonela, Minister for Mineral Resources and Energy, said that the government wanted more gold production units elsewhere in the country, through private investment and integration of local producers which will generate more employment and contribute to the development of the country.

Source: Lusa