Financing the Mozal Project
The essay below is generally going to look at the financing of financing the Mozal project. The primary critical obligation of this essay is to help us conduct an in-depth analysis of the various risks used in taking action to fund the Mozal project. Apart from that, the article is also going to look at multiple issues the employees face. The significant problems also to be discussed in this essay are the various problems the employees have in either construction, operating or even the sovereign risk. Lastly, we are going to go through the overall project by looking at various scholarly sources that will help us in correcting all the above information.
Firstly, let’s begin with the financing of the Mozal project, the project being an aluminum manufacturing project. There were various necessary resources required for the project to run swiftly and smoothly. These essential resources required were such as labor, raw materials, and also resources such as power and other machinery. For this project to surpass, there had to be sponsors to make add up for and everything that they needed in this sector, so they had to look for various sponsors. This is where one of them came from South Africa from a company which decided to supply power for the project we also had the company providing the skilled personnel so the project would not have various problems of experienced men. The other labor required was just needed from non-skilled people who did not have to be imported, and this was supplied by the homeland country, which was Mozambique.
Besides the labor personnel, we also had Mozambique, one of the biggest power supply companies which took a contract to supply the power to the for a period of twenty-five years. Apart from power, we also had the raw materials such as the mining tracks and even various types of machinery that were required in works such as smelting the aluminum. Through all these resources, there was a need for the sponsors to come in. Still, concerning this project, it was a hazardous project since it was a project being carried in a very financially unstable country, so there were various obligations that the board had to face due to the high risks that the companies were investing in. The raw materials were coming from the Australian company agreed to take part in the project.
Lastly, through the coming in of these sponsors, they mainly help in bringing up and constructing this project. This is because the project needed a lot of support to operate, and this was because the project was going to take long. Seeing the electricity company taking a contract of over twenty-five years for the company to operate, this means that the project needed the sponsors for it to work. In the section of sovereign risks game, these sponsors, by agreeing to supply the necessary resources to the construction, means that they were participating in a risk game which they neither knew it would operate or not. But due to the support they impacted in the project, there was a lot of confidence in managing the project.
References
https://www.academia.edu/39609337/Financing_the_mozal_project ( Accessed 14, 2020)
https://store.hbr.org/product/financing-the-mozal-project/200005 ( Accessed 14, 2020)