Mining in Mozambique

Mining in Mozambique
A historical reference

By the year 2000, hostilities had ended in the state, and the industry began to develop rapidly. Mozambique's economic growth rate was 6% annually. Large world-famous mining and metallurgical companies have begun rapidly developing rich deposits of coal and iron ore in this jurisdiction. The local government clearly understood, hat mining in Mozambique was a powerful incentive for an economic leap.

Advantages and disadvantages of the development of the mining industry in Mozambique

The rapid development of the mining industry was facilitated by:

  • a political stability;
  • a development of programs for the development of a system of private banks;
  • favorable tax rates and the availability of tax benefits;
  • the possibility of privatizing enterprises (more than 50% of companies are managed by foreign individuals);
  • many free territories for the construction of mining enterprises;
  • cheap labor.

At the same time, there are risks, associated with ASM (Artisanal Small-Scale Mining - “artisanal mining/mining”) in the gold mining industry, which account for about 90% of Mozambique’s gold, as well as high mining costs, which are often unjustified.

Earlier, the Mwiriti Lda - a gemstone company, analyzed gold reserves and concluded, that Mozambique’s gold reserve is six times that of South Africa, and that gold is 100% pure. Until 2012, the development of the gold mining industry was unlicensed, and only after the registration of the Gemfields project in 2016, legal processes for the extraction of Mozambique precious stones began to be implemented and it was announced, that until 2020 a gold production would increase by 1,1% annually. In 2017, within the framework of the EU project on environmental rights, environmentally friendly gold mining methods were introduced.

In 2010, Anadarko made successful discoveries of gas fields, which led to the fact, that Mozambique took 14th place in the world ranking. In 2011 and 2012, the Italian company ENI discovered several large gas fields. From that moment on, “a gas fever” began in the country. To date, there are more than 18 gas springs in Mozambique, but their deepwater location has led to the fact, that costs of their development are too high and unjustified.

Legislation and conditions for obtaining mining licenses in Mozambique:
  • Mining law;
  • Mineral Safety Regulation;
  • A regulation on the regime of tax benefits;
  • Rules of nature management in the field of mining.

Mining in Mozambique in recent years has attracted the attention of investors from all over the world. The rapid development of this industry and the growth of investment in this area are due to increased regulation of the extraction of natural resources in Mozambique. In order to carry out mining activities in this region, you must confirm your legal status, that is, you should obtain permits for mining activities in Africa. You can obtain African licenses of the following types:

  • for a mineral exploration;
  • for the sale of mining products;
  • to develop oil and gas deposits.

Also, the transfer of licensing rights to develop mineral deposits in Mozambique is available to you.

Obtaining a license for the exploration of natural resources in Mozambique implies, that natural resources, in the process of their extraction, are transformed into valuable products of the mining industry. The maximum validity of the permit is 25 years. It is also possible to renew the license once.

Obtaining permits for the sale of mining products in Mozambique is granted only to registered individuals/legal entities (residents), who are required to conclude a concession agreement for the extraction of natural resources in Mozambique. The license is valid for 5 years.

Licensing for the development of oil and gas deposits in Mozambique

Entrepreneurs, who wish to obtain permits for the development of oil and gas deposits in Mozambique are required to conclude a concession agreement for the exploration of oil and gas deposits in accordance with all requirements of the updated legislation.

Read also:
A transfer of licensing rights for the development of mineral deposits in Mozambique

The transfer of license rights must be approved by the Government of Mozambique and is subject to royalties on mining in Mozambique.

Export of natural resources

In order to obtain a license on exporting minerals from Mozambique, entrepreneurs must issue concession agreements for the development and extraction of natural resources in Mozambique in accordance with legislative and currency requirements.

Main trading partners of Mozambique are: South Africa, EU countries, USA, Portugal, Japan. Recent years have been marked by the formation of relations in the mining industry with the PRC, India and Brazil.

According to recent estimates, the development of gas deposits alone brings the state more than $10 billion a year. The main export of the mining industry are an oil and oil products (46%), a gas, gold springs, the aluminum (25%).

Professional assistance

Highly qualified experts from YB Case will provide specialized advice on how to apply for a mining license in Mozambique, provide a support at all stages of the registration of a Mozambique company for mining, and will, also, help in preparing a package of documents for licensing.

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