State integrates mining projects in Mozambique and mandates national processing

The Mozambican State will begin participating in mining ventures with at least 15%, according to the revision of the Mining Law, which will prohibit the sale of unprocessed mineral products in the country, while also creating areas for artisanal mining. The changes are contained in the proposal to revise said law, to be discussed on Thursday in parliament, with the Government admitting, in its rationale, that after 10 years of application, the current legislation presents “some gaps that demand the need to strengthen State sovereignty over mineral resources,” requiring the “capacity to fully capture revenues originating” from such exploration. Generally, the changes provide for the reservation of exclusive rights over strategic minerals to the National Mining Company (ENM) and the reinforcement of State participation in prospecting, research, exploration, processing, and marketing, as well as in the capacity for inspection, monitoring, and traceability of mining activities.

“Such commitment reflects a clear political orientation: subsoil resources must generate wealth that remains in Mozambique, creating jobs, empowering national companies, and financing essential public services,” Chapo adds, recognizing that the “national political and economic context justifies the urgency of the present reforms.” The revision proposal explains that the measures aim to “strengthen State sovereignty over mineral resources,” as well as State participation in mining ventures and “throughout the mineral resource chain” through the ENM, which will participate “with a minimum percentage of 15%, which may increase.” Furthermore, it aims to “guarantee the transformation of mineral resources into finished products in the country through the prohibition of the sale of unprocessed mineral products,” mandating the “establishment of pilot centers for the cutting and processing of minerals in communities where they can learn by doing the work.” The objective is to “allow value addition to be done in the country, which will boost the country’s industrialization and reverse the paradox of being a raw material supplier at the expense of industrialization, which constitutes a current challenge,” it reads. “Reserve exclusivity in the granting of mining rights over strategic minerals to the ENM so that it can guarantee the rational management of these resources and select development partners,” the law revision proposal adds. It also provides for “safeguarding the greatest benefit for local communities through their involvement in mining activity and obtaining benefit from the revenues generated by the sector through the creation of reserved areas for artisanal mining and the creation of two new licenses: small-scale mining and artisanal mining.” It also mandates channeling 10% of mining revenues to the development of locations where projects are developed, the management of which will be handled through a fund, and will require the Mining Regulatory Authority to create a “monitoring and control unit to ensure that only Mozambicans or those associated with foreigners provide goods and services to mining companies.”