| CAPANGA, Mozambique, March 7
CAPANGA, Mozambique, March 7 For Mozambican
tribal queen Zoria Macajo, the thatched-hut village of Capanga,
nestled in the hills above the Zambezi river, has been her
family's home for generations.
For mining giant Rio Tinto it is a headache
sitting on top of one of the world's largest untapped coal
reserves, standing in the way of the company's expansion.
Macajo, Capango's the 59-year-old leader is refusing to
leave her home until her people are paid for their land, a
contentious issue for Rio which has found it difficult to get
its Mozambique business running at full speed.
"Our people have rights. The company promised it would
compensate us," Macajo said, sitting on a straw mat outside her
house, the only concrete dwelling in the village where goats and
pigs roam freely.
"The people must receive their money," she said with several
of the village men nodding in agreement.
Rio said it had agreed with some families a like-for-like
compensation, promising houses and land in the new Mwaladzi
resettlement area, some 40 km (25 miles) away from Capanga.
The company said it has paid some families affected by its
operations, including the queen, and is negotiating separate
payments with a farmers' association, which it says holds formal
title over some 150 ha (370 acres) of land in the area.
But Macajo said she had not received any money and the
association does not represent her or others in the community.
Rio's Mozambique troubles are not unique. Mining companies
frequently walk a tightrope between the demands of the stock
market and those of local communities, demanding a larger share
of profits from the resources they sit on.
This often comes to a head if villages and communities have
to be moved to make way for mines, creating a flashpoint as
locals can dispute location, housing, compensation - and few
have official documents to prove their rights in the first
place. Often, those being moved run small-scale mining
operations and are reluctant to be evicted.
Macajo said her community was prepared to aggressively
defend their village against Rio Tinto, threatening a repeat of
violent protests that broke out in January last year when 700
families took to the streets over living conditions and lack of
fertile farming land in a resettlement built by Brazilian miner
HIGH STAKES FOR RIO
Rio Tinto, Vale and dozens of others have flocked to the
region since 2004, hoping to secure some of the 23 billion
tonnes of coal estimated to lie beneath the war-scarred state,
especially with supplies of quality coking coal scarce and
global demand growing.
But developing mines in the former Portuguese colony has
proven more difficult than initially imagined, with shoddy
railways and ports, depressed coal prices and frustrated
communities cooling the coal bonanza.
For Rio, the stakes are high in Mozambique, where it wrote
$3 billion off the value of its coal assets earlier this year,
in a hit that ultimately ousted its chief executive.
Making a success of Mozambique where his predecessors failed
would be a major success for incoming boss Sam Walsh. The
company has said it is reviewing its coal assets in the country
but Walsh has also said the project is not currently for sale.
Rio's write down on its Mozambican assets was largely due to
difficulties in getting the coal from pit to port, but the
community's resistance may place further hurdles in its plan to
expand its Benga mine, one of the assets the firm inherited when
it bought explorer Riversdale in 2011.
RUINS NOT HOUSES
The complaints of Macajo and others echo the frustration of
ordinary Mozambicans who feel the boom, rather than benefiting
them, is worsening their living conditions by pushing up the
prices of food, fuel and housing and threatening their land.
The families at Vale's Cateme resettlement have complained
about leaks, cracks and floods in homes, which they say the firm
has been unable to fix despite several attempts.
Cateme's location, some 10 km away from the main road and
another 40 km from Tete, also makes it difficult for people -
many reliant on jobs like brick making or selling vegetables -
to get work.
Vale said it was still rehabilitating some of the houses,
but residents like Domingo Foguete Domingos said they prefer to
be paid instead so they can build sturdier houses elsewhere.
"These are ruins, not houses," the 46-year-old said while
pointing to the cracks in the wall of his house.
Proper management of resettlements is a steep learning curve
for the government, communities and civil society in Mozambique,
who are often unaware what to ask for until it is too late.
"We have to teach people that this is not a favour, it is
their right," said Julio Calengo, an activist with the
Mozambican Human Rights League.
The government called the Vale fiasco a "learning exercise"
and later passed a law promising to fine firms or even withdraw
their operating licenses if they do not relocate communities in
a way that protects their social and economic interests.
Companies now need to prove that their resettlement areas
provide the necessary infrastructure to support sustainable
economic activities such as farming and while the tighter
policies were welcomed, critics wonder if the inadequately
staffed government will manage to enforce the rules.
Rio Tinto said it had consulted widely with communities and
the government and insists the process was transparent, but the
queen said she had yet to be officially consulted even as
workers began drilling holes around her land.
The company said more than 80 of Capanga households had
already been moved and nearly 600 await relocation. Most of the
families will be moved to the rural area at Mwaladzi, while a
quarter were classified for urban resettlement.
Macajo said Mwaladzi has asphalted roads, street lights and
more durable houses than those built by Vale, but the lack of
fertile farming land would still make it difficult for
residents, mostly subsistence farmers, to feed their families.
The community said it was hoping to use the money promised
from the resettlement to buy fertile plots elsewhere, while the
company said it was investigating the possibility of creating a
water catchment dam in the area to help irrigate the land.
Rio Tinto plans to continue the resettlement in April, but
Macajo vows no more families will budge until they are paid.
"I will not leave. They can kill me, but I will not leave
this land," she said.