Although the borders of Mozambique had nominally been fixed by the Berlin Conference of 1884–1885, Portugal lacked the capital to exert effective control or economic exploitation of the territory.

The first local labor supply contracts were drawn up for the Witwatersrand Native Labour Association (WENELA), as an official Mozambican recruiter for the mines in South Africa.

By recruiting for the South African mines, the Niassa Company came into direct competition against the Moslem tribal chiefs, notably the Yao, who still exported slaves to Arabia.

Although the Niassa Company quickly took steps to change its customers to the mines of Katanga in Belgian Congo, its South African investors lost interest.

[3] In 1913–14, a German banking consortium bought a majority of the shares of the Niassa Company, aiming to bring about a partition of Portuguese Mozambique between Germany and Great Britain.

With the outbreak of the First World War, the British government confiscated the German equities and handed them over to an English financial group led by Owen Philipps, chairman of the Union-Castle Line, which conducted several businesses in Portuguese East Africa, but which found the concession to be more of a liability.

[4] During the war, the Niassa Company's territory was the scene of several anti-Portuguese resistance operations by the local chiefs aided by the Germans (including in the Kionga Triangle).

The Niassa Company only managed to suppress the Makonde by the early 1920s, and the tribe later became the backbone of the FRELIMO movement in the 1960s and 1970s against continued Portuguese colonial rule.

Contemporary colonial thought held that the key to profitability would be a railroad from Port Amelia to Lake Niassa, which would open the interior of the territory to investments in agriculture and mines.