A recently enacted Mozambican law, mandating a 15 percent state stake in all mining ventures, has sparked apprehension among industry executives regarding its potential impact on foreign investment. This concern was voiced on Thursday by a prominent industry figure.
Mozambique holds a significant position as one of the world’s leading producers of graphite, a critical component in batteries for electric vehicles and energy storage solutions.
The Mozambican government asserts that the amendment to its mining legislation aims to “strengthen its management of strategic resources in defence of the national interest.” However, the country’s Chamber of Mines fears that these new provisions could destabilize investor confidence.
Geert Kolk, Vice President of the Chamber of Mines, articulated these concerns at a mining conference in Victoria Falls, Zimbabwe. “We will have, unfortunately in our opinion as the Chamber of Mines, a minimum of 15 percent free carry stake of the state in mining companies, which we fear will not make Mozambique any more attractive as an investment destination for foreign capital,” Kolk stated.
Further stipulations within the new regulations prohibit the export of unprocessed or semi-processed mineral products. Exceptions to this ban require ministerial approval, which is contingent upon the submission of concrete plans for local processing.
Kolk affirmed the industry body’s support for the initiative to enhance local processing capabilities. “This is a trend in the region, a trend in Africa, to do more of the value-add in-country, and rightly so,” he commented.
He further emphasized the necessity for governments to ensure reliable access to essential infrastructure, such as water, electricity, and logistics, to render local processing economically viable for investors.
Mozambique is home to some of the world’s largest graphite deposits, notably at Syrah Resources’ Balama mine in the northern region. The country also hosts the world’s largest ruby mine, Montepuez, operated by Gemfields, also located in northern Mozambique. Additionally, Mozambique possesses substantial coal assets, which were previously under the ownership of major international mining corporations like Rio Tinto and Brazil’s Vale.