Mozambique Seeks To Increase Local Ownership In Mining Projects

Mozambique Seeks To Increase Local Ownership In Mining Projects

Mozambique plans to increase central government and local participation in new mining projects, Reuters quoted a government official saying, ahead of the country’s next rounds of bidding for coal, oil and gas next year.

The former Portuguese colony wants to ensure its citizens benefit from its mineral wealth and balance it national interest with those of investors.

Abdul Noormahomed, deputy mineral resources minister, told Reuters on Tuesday that the cabinet had approved a new mining policy, replacing an old one that was adopted in 1998, to promote greater participation by locals in the sector.

“Some actions are already ongoing so that certain production and marketing licenses are given exclusively to Mozambicans, as well as to raise the participation of flag (state-owned) companies from 5 to 25 percent in any new deals,” Noormahomed said.

The new policy will have to be passed in Parliament in the new year.

Mozambique has seen a flood of foreign investment into its mining sector, particularly coal, in the last few years. The southern African nation is estimated to have some of the world’s largest reserves of coking coal, used in steel-making.

A number of southern African politicians have campaigned to nationalize mines, or demanded controlling stakes in companies be given to local black people as in Zimbabwe.

Major companies developing big coal and gas reserves in Mozambique include Rio Tinto, Vale, Anadarko and Eni. Vale said earlier this month it plans to sell a 15 to 25 percent stake in its coal operations, including those in Mozambique.