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Militants In Mozambique Threaten Massive Foreign Investments Into Natural Gas

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Militants In Mozambique Threaten Massive Foreign Investments Into Natural Gas

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On June 27th, armed militants, likely ISIS, killed eight workers from a subcontractor construction company – Fenix Construction – for the gas megaproject that is progressing in Cabo Delgado, northern Mozambique.

The vehicle they were in was attacked four kilometres north of Mocímboa da Praia when the town was under attack about 70 kilometres south of the construction site of the enterprise led by the oil company Total.

Of the 14 individuals in the vehicle, three fled into the bush and survived while three others remain missing, in addition to the 8 that were killed.

Meanwhile, South African petrochemicals giant Sasol Ltd gave up on its licence to explore for gas off the Mozambique coast, the company said.

“Sasol will return Block 16/19 in its entirety to the Government of Mozambique. To this end, a withdrawal notification has already been sent to the relevant Mozambican authorities”, the firm said in a statement.

Sasol is the world’s top producer of motor fuel from coal and is trying to shed assets to pay off its debt pile and avoid a rights issue of up to $2 billion.

Furthermore, the increased ISIS militant activity in Mozambique is making any such endeavor dangerous, with piracy also on the rise.

Meanwhile, French Energy giant Total is moving ahead with its $23 billion East Africa liquefaction project.

Total’s project is an attempt to boost the, once-booming, natural gas market that has foundered in recent months under sagging demand as lockdowns triggered by the coronavirus response have hurt industrial activity.

Some projects, including Sempra Energy’s investment in a Port Arthur, Texas, LNG export terminal, have been pushed back.

The most significant pushback against these projects, however, is not the COVID-19 pandemic, but rather the increased militant activity.

There are some very formal and ineffective attempts to counter the militants, but no results have been achieved so far.

The issue is that delayed pay, and even if it comes on time it’s low has led to even the soldiers that are in Cabo Delgado to fight against the militants, are, instead, abusing the local population and looting.

On June 16th, Mozambican president Filipe Nysui announced that soldiers deployed to Cabo Delgado will receive a bonus, augmenting their pay.

Assuming the money actually reaches the enlisted ranks, it will at least prevent soldiers from having to prey on the civilian population for food and other necessities

The government also claimed a military success, with police operations director Victor Novela displaying photos of machetes, motorbikes, and other items recovered from insurgents during operations in Muidumbe district.

On the international assistance front, the prospect of military support for Mozambique in Cabo Delgado has become a political issue in Portugal. Portuguese foreign minister Augusto Santos Silva told reporters that Portugal is already working closely with Mozambique to assist counterinsurgency efforts from afar.

Finally, a report emerged in Africa Monitor of growing tension between Mozambican police, who have been the lead agency in the government’s counterinsurgency effort and have done some of the sharpest fighting of the conflict, and the Mozambican military, which is dissatisfied at being cut out of the potentially lucrative contracts associated with the conflict.

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