VICTORIA FALLS – Mozambique’s new law requiring the state to have a 15 percent stake in all mining ventures could deter foreign investment, an industry executive said on Thursday.
The southern African country is among the world’s top producers of graphite, a key material used in batteries for electric vehicles and energy storage.
Mozambique says it amended the mining law “to strengthen its management of strategic resources in defence of the national interest”, but the country’s Chamber of Mines fears it could unsettle investors.
“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,” Geert Kolk, vice president of the industry body, told a mining conference in Victoria Falls, Zimbabwe.
The new rules also ban exports of unprocessed or semi-processed mineral products, except with ministerial approval tied to plans for local processing.
Kolk said the industry body backed the push for more local processing.
“This is a trend in the region, a trend in Africa, to do more of the value-add in-country, and rightly so,” he said.
He added governments should provide reliable water, electricity and logistics to make local processing viable for investors.
Mozambique has one of the world’s largest graphite deposits at Syrah Resources’ Balama mine in the north.
The world’s largest ruby mine, Montepuez, owned by Gemfields, is also in northern Mozambique. The country also has significant coal assets previously owned by Rio Tinto and Brazil’s Vale. – Reuters
