Big Ethanol descends on Africa for land, water, and sympathetic governments
A few weeks ago I was in Mozambique for a conference that brought together NGOs, small-scale farmers, agricultural associations, and local media to discuss the impact of biofuel production in southern Africa. While the United States and other Western countries mandate ethanol quotas to supposedly reduce their consumption of fossil fuels, many farmers in Africa are questioning the reasons and implications for such programs. As the only American at the conference, I was continually asked about the real reasons behind America’s ethanol push and the truth about biofuels and greenhouse gas emissions. Most strikingly they wondered if the United States had considered trying to reduce its overall consumption of oil rather than simply trying to replace it with something else.
The questions of the attendees highlighted the sophisticated knowledge that people throughout the world have about the myriad complications of biofuels (known in Africa as agrofuels). Yet to date, most of the biofuel debate has been based on the environmental argument — do they actually reduce greenhouse gas emissions? Significant academic research published in Science magazine, the Proceedings of the National Academies of Science, and the journal Atmospheric Chemistry and Physics earlier this year clearly showed that ethanol production is creating increased greenhouse gas emissions and fertilizer pollution in the United States. As we continue to produce ethanol here at an unprecedented rate, we are in fact hurting the very thing we are trying to solve.
But the story looks far different in Mozambique and other parts of Africa. Biofuel production in Mozambique is not a Congressional mandate or an attempt to wean a country off of its massive oil dependence. In Africa, the biofuel frenzy is the newest form of colonialism, as corporations throughout the world fight for a stake in the fertile soils of an impoverished continent. With mining resources, precious jewels, and oil reserves drying up throughout Africa, many corporations are keenly positioning themselves to overtake huge quantities of land and water for biofuel production in developing countries.
In Mozambique I had the opportunity to hear directly from two farmers from Massingir in the Gaza Province of Mozambique. Augosto and Simiao had journeyed to the conference to tell the story of their region in hopes that someone there might be able to tell them what they could do. Working through a translator the men detailed the sugarcane production and ethanol processing plant brought into the area by a company called ProCana. As far as they knew, no contract had been signed in the local community with the company. The community had been told little about the project in the past several years but had been promised work, housing, infrastructure, and schools.
Yet, Augosto and Simiao made clear that none of this had actually happened. Instead, ProCana had been granted 30,000 hectares of land for biofuel production — land usually used for cattle and food production. The men also noted that the water for the sugarcane production was going to come from the Massingir dam — a crucial commodity for small farmers in a region that has been hit by serious droughts. The company had even built a road, without permission, straight through one of the farmer’s land. As I sat and listened to their mounting story, it became incredibly obvious how powerless they felt and how desperate they were to understand their situation. It caused me to wonder how this had happened and to investigate the story behind ProCana.
In October 2007, ProCana Limitada, a Mozambique company, signed an investment agreement with the government of Mozambique for the development of sugarcane production, the largest ethanol plant in Africa, infrastructure, and an electricity plant in Massingir. ProCana’s foreign partner is the Central African Mining and Exploration Company — a London-based company who pledged an investment of $510 million for the project. But, in the months after the contract was signed, 94 percent of ProCana was bought out by a new company — BioEnergy Africa, based in the British Virgin Islands.
Last month, BioEnergy Africa had an initial public offering on the London stock exchange, which earned more than $15 million. Despite the IPO, more than 70 percent of the company remains in private hands. According to public records on the company, the largest owner of BioEnergy Africa is CAMEC. It turns out that the only three staff listed on the BioEnergy Africa website also all work for CAMEC. Philippe Edmonds, a former English cricket star reportedly worth $45 million, started both companies and serves as their Chairman. CAMEC came under fire back in 2006 when it acquired $80 million worth of cobalt and copper mining assets in the Democratic Republic of Congo from Billy Rautenbach, who in return received up to a 20 percent share of CAMEC. It turns out Rautenbach is a fugitive from South Africa wanted on hundreds of charges including theft and fraud. When Rautenbach was deported from the Congo in 2007, CAMEC’s stock price plummeted. It was just a few short months later that CAMEC entered into its contract with the Mozambique government for the Massingir ethanol project.
In the past in Africa it was diamonds and copper, then oil, and now biofuels. Edmonds and his counterparts have their sights on Mozambique and other countries in Africa suitable to grow ethanol. Working through a new company, Edmonds seems set to be on the front edge of an ethanol scramble. He is not alone, as corporations throughout the world are looking for biofuel production land in Brazil, Indonesia, and other parts of Africa. And while biofuels are presented in many ways — an opportunity for small-scale farmers, a way for western countries to decrease their fossil fuel consumption, or a means for energy independence — they really look just like any other corporate profit opportunity. Unfortunately, those who stand to profit from this development are not the small-scale farmers trying to make a livelihood in Mozambique, the average Westerners hoping for reduced gasoline costs, or the politicians seeking energy independence. Instead, like so many other profit ventures, only a few will find success in biofuels.
Let’s be clear: I am not closing the door on biofuels entirely. I am intrigued by the potential for certain crops to be grown in a sustainable way that may actually offer environmental benefits, yet I question how this will impact land for food production and affect the developing world. Our energy needs are great and they demand our attention. But increasingly it seems that the “solutions” to our energy crisis are nothing more than the status quo dressed up differently. Biofuels are touted as an environmental option that can reduce greenhouse gas emissions; yet, research, especially on ethanol, shows this is not the case. They are discussed as a way for America to become “energy independent.” But are we really “independent”? The U.S. imported more than 64 million gallons of ethanol just in the month of July. And let’s not forget the small-scale farmers in the developing world who have been promised so much with so little returned.