Coal has been mined in Mozambique since 1856, and exploitable reserves were said to be two billion tons in 1991. The output was estimated at 534,000 tons in 1981 but only 70,000 tons in 1998. The mines were nationalized in 1978. Surveys have indicated the strong possibility of offshore and onshore oil deposits. Natural gas reserves have been estimated at 40 billion cu m. As of 1999, the government was negotiating with several South African companies to build a 900 km (560 mi) natural gas pipeline from the Temane gas field to South Africa's Gavteng province.
The Cahora Bassa Dam went into operation in the fall of 1975 in Tete Province. In 1977, Mozambique started selling substantial quantities of electricity to South Africa, but the transmission line has been sabotaged repeatedly by the Mozambique National Resistant (MNR) beginning in 1981. Work started on a national power grid in 1980, including plans to add to Cahora Bassa's generating capacity, which was 2,078,000 kW in 1994. In 2001, total installed capacity was 2,388,000 kW. Electric power production in 2000 totaled 7 billion kWh, of which 96.4% was hydroelectric and 3.6% was from fossil fuels. Consumption of electricity in 2000 was 925.8 million kWh. Sabotage of the main power line pylons prevented the exporting of electricity to South Africa during the early 1990s.
Mozambique imports all of its petroleum supplies, though oil prospecting is pursued both on and off shore. Mozambique's largest domestic fuel source is the Moatize coalfield near Tete, with an estimated two billion tons of reserves, but lack of infrastructure prevents further development.