Mozambique is celebrating the approval of a $2 billion port expansion backed by Dubai’s DP World and South Africa’s Grindrod group. The deal involved a 25-year extension of the existing concession which will end in 2058 and also include Mozambique’s state-owned railway operator. The agreement envisages over half of the $2 billion of investment to occur by 2033 when the original concession is to end. Grinrod and DP World teamed up in 2008 to win the original 25-year concession.
Market share is up for grabs in the region due to South Africa’s grabbling with inefficiencies in its own port infrastructure. Chronic mismanagement by Transnet has cost exporters billions. The ANC-led ports are plagued with corruption, logistical bottlenecks, and neverending labour disputes. South Africa fell in port efficiency in 2023 from 86th to 119th in the World Bank’s Container Port Performance Index.
Maputo offers an alternative for shippers who gain shorter transit times and improved efficiency by bypassing South Africa. The Maputo port has already seen a surge in cargo volumes, particularly coal, chrome, and magnetite ore, previously destined for South African ports. Coal exports through Maputo, for instance, soared by 25% in 2023, highlighting the shift in trade dynamics.
Of the $2 billion investment package for the Maputo port expansion, nearly $1.1 billion will be poured into the project by 2033 focusing on crucial upgrades. Port capacity is set to jump from 37 million tons per year to 54 million tons by 2058, a 46% increase. The coal terminal will be expanded in Matola and will see its annual capacity grow by 140%, from 7.5 million tons to 18 million tons. Shipping container capacity will quadruple, reaching a million units annually by 2058.
Maputo didn’t get here overnight. In 2007, the port handled a mere 5 million tons of cargo per year. Grinrod led the charge, and brought in DP World, to successfully invest $800 million to improve the port. The gamble has paid off handsomely with cargo volumes more than quintupling in 15 years to where they are today.
News from Emergingreal
News from Emergingreal
