In 2013, Rio Tinto had to write down its Mozambican assets by US$3 billion as a result of failure to transport its coal to port for export. The company had invested huge sums of money based on assumptions of vast coking coal reserves that it would export. Upon the insurgence of extremist rebel groups, with escalating violent activities, the rail network was disrupted and there were increased security risks for normal operations to continue. 

The company suffered great loss as it failed to recoup its capital outlay and eventually failed to continue its operations. The high-security risks at a time when investment capital is yet to be recouped, have the potential to turn away more foreign capital injections in the gas-rich country. 

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Evelyn is a finance and business content writer with a passion for business news in Africa. Her expertise is in analyzing African equities and telling the truth when it comes to doing business on the continent!

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