by Staff Writers
Maputo (AFP) Oct 29, 2012
Japan signed a memorandum of understanding with resource-rich Mozambique on Monday as it ramps up its hunt for new sources of energy after it shuttered all but two of its nuclear reactors.
The deal will allow Japan, still scarred bythe melt-down at the Fukushima nuclear plant last year, to tap the African country's natural resources.
Japan hopes Mozambique's vast coal and natural gas reserves can become a source of cheaper fuel, allowing it to break its reliance on suppliers in Australia and Qatar.
"Mozambique could be one of the most important suppliers of mineral resources for our country," said visiting State Minister of Economy, Trade and Industry Isao Matsumiya in Maputo.
The Asian country gets over 60 percent of its thermal coal and 20 percent of its natural gas from Australia. It hopes to secure a steady supply of both from Mozambique, at lower cost.
"Diversification is something we have to think of," Toshihiko Fujii, an official with Japan's trade and industry ministry, told AFP.
"Mozambique is a big, big player," he said.
With Japan turning away from nuclear power, coal-fired power now accounts for roughly a quarter of its energy output, and prices have risen sharply this year.
Japan asked Mozambique to speed up the awarding of a coal mining concession to its Nippon Steel, which plans to begin producing both coking coal for steel and thermal coal to fire power plants back home by 2014.
Nippon holds a 33-percent stake in the project mooted for the Moatize basin, one of the largest untapped coal reserves in the world.
Mozambican officials told AFP a decision on the concession was imminent.
Japan has also come to rely heavily on natural gas imports since the earthquake. It is facing soaring prices as they are index-linked to oil prices.
The high cost of importing liquid natural gas was partially blamed for Japan's first trade deficit in three decades, in 2011.
Meantime Japan's Mitsui Corporation has partnered with US-based Anadarko to exploit up to 30 trillion cubic feet of gas discovered in deep water off Mozambique's northern coast.
The plant is to come on stream by 2018.
"We hope the resource will be supplied to Japan in a stable manner and at a fair price," said Matsumiya.
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