Estimating resource rents for Mozambique

This paper estimates resource rents for Mozambican coal mining using company-level data employing the residual value method devised by SEEA-Energy (the multi-purpose conceptual framework for organising energy-related statistics) and compares the findings with the World Bank's estimates of coal rents. The latter estimates are often used in the resource curse literature and also guide the World Bank's policy notes, forming the baseline of their policy advice on resource exploitation. On average, the results show unit coal rents for the 2011–2020 period that are less than half of the World Bank estimates, suggesting that the World Bank overstates coal rents for Mozambique considerably. The main driver of this discrepancy is the World Bank's underestimation of extraction costs. The results suggest that studies employing resource rent estimates should consider sensitivity analyses and greater use of local data, and that the World Bank's policy advice should be interpreted cautiously to avoid unreasonably high expectations.