Global fuel giant Total's evacuation of thousands of workers, many of them South Africans and foreigners, from its $20bn (R309bn) liquid natural gas (LNG) exploration site in northern Mozambique is expected to have an economic impact on SA and the region.
A series of deadly attacks by Islamic State-linked insurgents on the outskirts of Total's facilities in the Afungi peninsula on New Year's Day saw the French company order the evacuation and that of its subcontractors' non-core staff.
Sources with knowledge of the evacuation said more than 2,000 workers were involved, bringing Total's operations to a near halt.
Mozambican staff were ordered to remain at home, while foreign staff were airlifted from an airstrip inside Total's facilities to Maputo, the Mozambican town of Palma, or SA.
On Saturday last week, insurgents, who for two days clashed with Mozambican security forces around Quitupo village, reportedly came within 1km of the airstrip. The village was built by Total to house Mozambicans who were relocated from the 7,000ha site.
Afungi, which is also home to ExxonMobil's planned exploration site, is expected to see 30-million metric tons of LNG mined annually, making Mozambique one of the world's biggest LNG exporters. Total plans to produce the first LNG in 2024.
In August, Total signed a security memorandum of understanding with the Mozambican authorities for the protection of the LNG site and Total's facilities
Scores of SA-linked businesses are subcontracted to Total, with food and medical supplies coming from SA and hundreds of South Africans directly and indirectly employed by Total.
Since 2017 the insurgents' estimated 3,000 members have waged a deadly war with the country's security forces in the gas-rich province of Cabo Delgado, making the port town, Mocimboa da Praia, their capital.
The fighting has reportedly left nearly 3,000 people dead and displaced 550,000.
Palma, which houses numerous South African-owned resorts and is the only town in Cabo Delgado not under the control of the insurgents, is on the brink of collapse, according to security analysts.
Jasmine Opperman, an Armed Conflict Location & Event Data Project analyst, said Palma's capture would mean the Afungi industrial site would be cut off completely.
"Everything within Cabo Delgado is now under the insurgents' control. The area from Mocimboa da Praia north to the Tanzanian border is a no-go zone."
She said the insurgents had become increasingly sophisticated.
The recent attacks were not directed specifically against Total but more at seizing control of the Mozambican government forces' supply lines, Opperman said.
"This has created immense tension within Total, which is meant to be protected by soldiers. It has exposed government force weaknesses.
"Total cannot afford to withdraw, given the projects that are running. They realise the situation cannot be ignored, with the facilities having to be protected at all cost.
"We will see the privatisation of security around Afungi because the government cannot guarantee security. Total will use a security agreement with the Mozambican government to do this, especially as the insurgents' access to weapons has increased their land and maritime capabilities, which are a major threat to Total's sea operations."
In August, Total signed a security memorandum of understanding with the Mozambican authorities for the protection of the LNG site and Total's facilities.
The agreement can be invoked if the Mozambican government is unable to control the insurgents, with the establishment of a joint task force, which Total will logistically support.
Political economist Daniel Silke said it was critical the crisis be resolved, and it was urgent that both SA and the Southern African Development Community (Sadc) help stabilise the situation.
"The threat is now probably the most pressing security risk for Southern Africa. The silence of SA, the African Union and Sadc is damning.
"Outside forces, who come from beyond the region's borders, are using the weak Mozambican state to try to tap into a revenue stream which should be economically bolstering the region.
"It's an incredibly dangerous position to be in. If left to boil, as it has been for the past three years, it can mushroom and destabilise the ability of Mozambique and the region to economically move forward."
Silke said the risk to South African businesses involved in the project, which include engineering, logistical and supply companies, is huge.
"This situation carries major economic implications for South Africa. If left unchecked, this has the potential to economically destabilise other Sadc countries."
Professor Philippe Burger, head of the University of the Free State's economics and management sciences department, said the economic impact of the violence on Mozambique's neighbours was alarming.
"Any delays in the project from Total shutting down will have an economic ripple effect in terms of lost business. Under the current pandemic climate no business can afford to be lost."
He said the security threat would hit neighbouring economies hard. "It directly impacts supply businesses subcontracted to Total. That means job losses. Our regional economies are being economically undermined, which cannot be allowed."
Professor Hussein Solomon, head of political studies and governance at the University of the Free State, said Sadc's lack of involvement showed the entity was useless and "nothing but a paper tiger".
"The situation carries ramifications for the region from an economic, political and governance perspective. The economic impact is particularly huge."
He said various South African companies, not just those involved in energy and engineering, were operating in the area.
"We have a direct threat to our businesses, especially those involved in the hospitality industry and food and logistical supplies.
"Given the economic impact of Covid-19 on businesses, which saw Sadc lose billions of dollars, we cannot economically afford this situation."
Solomon said that though there was entrenched co-operation between organised crime groups and the insurgents in the region there was zero co-operation among Sadc members on the situation.
"This is alarming, given the terrible economic and political impact. An intervention is needed, but part of the problem is that Sadc has absolutely no notion of how to address this situation, with little or no capacity."
Total refused to answer detailed questions from Business Times, including on South African logistics and supply businesses involved in the project, or whether it would invoke the security agreement.
In an e-mail, Total said: "In view of the evolving security situation in Cabo Delgado and the district of Palma, Total . has decided to reduce the number of personnel present at the Afungi site. The demobilisation process is under way in an organised manner .
"Total is following the development of the security situation with the greatest attention, in conjunction with the Mozambican authorities, and taking all necessary measures to ensure the safety and security of its staff and subcontractors."
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