President Thabo Mbeki to Co-Chair South Africa - Mozambique Economic Bilateral Commission

Pretoria - South African President Thabo Mbeki will on Thursday 29 June 2006 depart for Maputo, Mozambique where he will co-chair the South Africa - Mozambique Heads of State Economic Bilateral Forum together with his counterpart, Mozambican President Armando Guebuza scheduled for the same day.

President Mbeki's visit to Mozambique comes within the context of South Africa's commitment to strengthen relations with countries of the SADC region with a view to achieving the African developmental agenda.

In this regard, the SA-Mozambique Heads of State Economic Bilateral Forum focuses specifically on consolidating economic bilateral relations between both countries. South Africa has emerged as the main trading partner for Mozambique and its main source of foreign direct investment (FDI). The creation of a transport and development corridor linking the port of Maputo with South Africa's industrial heartland symbolises the importance of these bilateral ties.

The Presidential entourage is expected to include Ministers Mandisi Mphalwa, Jeff Radebe, Alec Erwin, Martinus van Schalkwyk, Buyi Sonjica and Deputy Foreign Minister Aziz Pahad.

Issues on the agenda of these discussions between Presidents Mbeki and Guebuza on Thursday 29 June 2006 are expected to include, among others:

• Migration - the implementation of visa abolition agreement, hours of operation of the Lebombo-Ressano-Garcia Port of Entry and the Giriyondo Port of Entry;
• Tourism and Environment - the Greater Limpopo Transfrontier Park, new bilateral agreement on Fisheries and Marine and Coastal Management and the Lubombo Transfrontier and Resources Area;
• Minerals and Energy - the Cahora Bassa project, the northern Mozambique Power Development Initiatives, the supply of additional electricity to Maputo, the Pande and Temane Natural Gas Project;
• Transport and Communication;
• Agriculture;
• Finance - the Avoidance of Double Taxation Agreement; and
• Trade and Industry - implementation of the MoU on Economic Co-operation and regional integration

President Mbeki is expected to conclude his visit to Mozambique ahead of his visit to Banjul, The Gambia where he will lead a senior government delegation to the 7th Summit of African Union Heads of State and Government scheduled from Saturday - Sunday, 1-2 July 2006.

Economic Bilateral Relations

South African companies, State Owned Enterprises and private enterprises, large and SMEs, have invested in Mozambique.

Among the large foreign investments in Mozambique to date is Mozal, the aluminium smelter at US$ 2.3 billion. Mozal is jointly owned by the South African Industrial Development Co-operation, the Australian mining group BHP Billiton, and the Japanese Mitsubishi Corporation. The project represents the IDC's first and biggest venture outside South Africa and has provided huge benefits to the Mozambican and South African economies.

Other South African investments in Mozambique include:

• The Sasol gas pipeline project
• The SA Breweries investment in beer factories in Maputo and Beira
• The South African power utility Eskom's investment in Motraco, a consortium of publicly owned electricity companies that includes Mozambique and Swaziland
• The investment by banking group ABSA for an 80% stake in the Mozambican retail bank Banco Austral
• The investment by McCormack developers in Matola Plaza, as part of the Maputo Development Corridor
• The second cellular licence by Vodacom.

Economic Trade Relations

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Pretoria
0001

28 June 2006