Mining activities in Mozambique contributes only 2% to GDP. Currently most of the country’s official mineral output is derived from three mining concerns, which include gold, bauxite and graphite. Most of the major projects currently undergoing construction or feasibility are focussed on heavy mineral sands, coal, natural gas as well as, downstream, aluminium smelters, hot briquetted iron and steel plants.
Mozambique’s geology is highly varied and consists mainly of Precambrian terrains (ranging from Archaean to Upper Proterozoic rocks), covered predominantly in the south by Phanerozoic cover (ranging from Jurassic through to Tertiary rocks). Most gemstone, gold, base metal and carbonatite hosted minerals are located in the older Precambrian terranes. The younger cover contains industrial minerals, including coal, alluvial diamonds and heavy mineral sands.
Mozambique has an estimated 50 000 artisinal workers who concentrate on alluvial gold and gemstone workings.
Very little investigations have been made in Mozambique for base metals, although BHP carried out an extensive reconnaissance program over the Niassa, Nampula and Cabo Delgade provinces. The Meluco area in the Cabo Delgade province was considered the most prospective based on geochemical and geophysical surveys completed. Areas close to the Zambian and Malawi borders in the Tete province also have defined base metal potential. The Chidwe and Massamba copper deposits have had little thorough geological investigation in the past.
The Mozambican Government is firmly committed to encouraging foreign investment in developing Mozambique’s fledging mining industry. A new mining and geological policy has been implemented with the existing legislation, which improve the country’s competitive position in the region. All applications for exploration and mining rights have to be addressed to the Minister of Mineral resources and Energy for processing by the National Directorate of Mines.
In general, large scale and foreign investment projects are subject to individual licensing agreements. Basic license conditions are outlined in the table below:
|
License Type |
Duration
(years) |
Renewable (years) |
Cost
($/ha) |
Additional notes |
|
Reconnaissance |
1 |
No |
0.10 |
Non – exclusive – for larger projects. The holder has a right to an exploration license over a reduced at the end of this period |
|
Exclusive Exploration License |
4 |
2 |
1 |
At each renewal, the holder has to reduce area(s) by 50% and needs to submit updated exploration and expenditure reports regularly. Mineral rights fees rise annually by $0.50/ha |
|
Mining License |
25 |
15 |
0.30 |
The holder of an exploration license has a right to apply and be granted a mining ,license for a particular mineral and area. A land use fee of $0.30/ha is levied for the duration of the license. |
Corporate income tax is set at 35%, with a 50% reduction allowed for the first ten years from the start of production. The government has set out the following incentives:
- Exploration and development expenditures may be accumulated and carried forward until the first year of production.
- A choice of depreciation rates
- Exemption on import duties for all equipment, materials and subcontractors.
- Exemption of the dividend withholding tax, normally levied at 18% for ten years.
- Exemption from Sales Tax, duties and taxes on mineral exports.
The following royalties are payable to the state:
All mineral production – 3%, excepting precious metals – 5%, Gemstones – 6% and diamonds – 10%
