VZCZCXRO5887
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #0308/01 0740737
ZNR UUUUU ZZH
R 150737Z MAR 07
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 6984
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLMC/MILLENNIUM CHALLENGE CORP  0175
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 MAPUTO 000308 
 
SIPDIS 
 
SIPDIS 
 
AF/S FOR HTREGER AND JMALONEY 
JOHANNESBURG FSC FOR RDONOVAN 
JOHANNESBURG TDA FOR DSHUSTER 
USDOC FOR RTELCHIN 
MCC FOR SGAULL 
USAID FOR AFR/SA 
 
E.O. 12958: N/A 
TAGS: ECON EAID EINV ETRD MZ
SUBJECT: Mozambique - February Economic Digest 
 
 
MAPUTO 00000308  001.2 OF 002 
 
 
¶1. This is a brief summary of significant economic developments in 
Mozambique during February 2007.  We provide it as a supplement to 
our other reporting.  The items discussed are: 
 
 
-- Mozambique Launches Road Sector Program 
 
-- Norwegian Firm to Build New Aluminum Smelter 
 
-- Chibuto Titanium Mine to be Scaled Back 
 
-- MOU Signing Kicks-Off PROAGRI II 
 
-- Japanese to Support Mozambican Technology Institute 
 
-- Microsoft Continues Assistance to Mozambique 
 
 
Mozambique Launches Road Sector Program 
---------------------------------------- 
 
¶2.  On February 28 the Government of Mozambique (GRM) and 
international donors launched the Integrated Program for the Road 
Sector (PRISE).  PRISE is scheduled to start during the first 
quarter of 2007 and run through 2009.  The GRM will contribute 30 
percent of the required funding for the project, currently estimated 
at USD 1 billion.  Restructuring the National Road Administration 
(ANE) at both provincial and central levels is part of the new 
program, which also includes the nomination of a new ANE Board of 
Directors and executive director.  The GRM and donors worked 
together to develop the program, which focuses on the construction, 
repair and maintenance of roads and bridges, the development of 
lower cost materials and a road safety campaign.  PRISE is part of 
the overall Road Sector Strategy, which covers 2007 through 2011. 
 
Norwegian Firm to Build New Aluminum Smelter 
-------------------------------------------- 
 
¶3.  During his visit to Norway in the middle of February, President 
Guebuza announced that a Norwegian firm planned to construct a new 
aluminum smelting plant in Mozambique, in Sofala province in the 
center of the country.  This smelter would be the second in 
Mozambique; in 2000 the Australian company BHP Billiton and partners 
constructed the Mozal smelter outside Maputo.  According to 
diplomatic sources in Maputo, the Norwegian company is Norsk Hydro. 
In 2006 Norsk Hydro won rights to an onshore concession in the 
Rovuma basin (near the border with Tanzania) to explore for oil and 
gas.  According to press reports from the Guebuza visit, Mozambique 
annually receives approximately USD 70 million in assistance from 
Norway. 
 
Chibuto Titanium Mine to be Scaled Back 
--------------------------------------- 
 
¶4.  The Australian mining giant BHP Billiton is going to reduce the 
scale of its planned titanium mine project at Chibuto, in southern 
Mozambique, according to press reports in late February.  (Note: The 
Chibuto mine has not yet gone into production.)  BHP Billiton said 
it planned to reduce activity because of a fall in the world price 
of titanium.  The company will initiate a new study of the resource 
at Chibuto next year, with a view toward reducing the level of 
output.  According to BHP Billiton, Chibuto has supplies of titanium 
sufficient to sustain mining activity for "100 years."  BHP Billiton 
purchased the Chibuto concession from WMC Resources in 2005. 
 
MOU Signing Kicks-Off PROAGRI II 
--------------------------------- 
 
¶5.  On Monday February 12, Glauco Glazuola, head of the European 
Commission and Henrique Banze, Deputy Foreign Minister, signed a 
memorandum of understanding to grant funds for the second phase of 
the Agriculture Development National Program (PROAGRI II).  Under 
the program, donor nations pledged nearly USD 20 million for 2007 
through 2009.  These funds would continue programs from PROAGRI I 
and start implementation of the second phase.  The focus of the 
PROAGRI program, part of the overall Absolute Poverty Reduction 
Action Plan (PARPA II), is to support small farmers, conserve 
natural resources and develop commercial agro-industries for both 
domestic consumption and export. 
 
Japanese to Support Mozambican Technology Institute 
--------------------------------------------- ------ 
 
MAPUTO 00000308  002.2 OF 002 
 
 
 
¶6.  The Japanese International Cooperation Agency (JICA) announced 
in February financial and technical assistance to the Mozambican 
Institute of Information and Communications Technologies (MICTI) for 
the training of mid-level technical staff.  Under the program, 
Mozambicans will receive technical training in Japan and Japanese 
specialists will come to Mozambique.  In addition, MICTI will 
receive a new library, along with laboratory material and equipment. 
 An initial disbursement of USD 500,000 covers the first phase of 
the project, which will run through 2009. 
 
Microsoft Continues Assistance to Mozambique 
--------------------------------------------- 
 
¶7.  On February 21 Microsoft Corporation and the GRM signed a 
three-year partnership agreement that introduced a framework for the 
purchase and management of Microsoft licenses in government and 
public institutions.  The agreement also facilitates Mozambique's 
ability to access Microsoft's Information and Communication 
Technologies (ICTs).  This agreement continues a relationship 
between Microsoft and Mozambique that started in 2004, and allows 
for the adoption of standard prices, with bonuses for government 
institutions and possibly some public companies.  Initially over 
2400 computers in various Ministries and government institutions 
will receive licenses. 
 
Johnson