Friday, July 19, 2024

Mozambique strengthens control over mining industry

Mozambique will begin strategic control of its mining industry in January. The French multinational SGS, after winning a public tender promoted by the Mozambican government in August 2022, will assume responsibility for overseeing the quantities, prices and specifications of the minerals extracted and exported by the country.
Until then, mining companies were responsible for declaring the specifications and prices of ores on the international market, often resulting in undervaluation that was detrimental to the Mozambican economy. According to João Macaringue, deputy coordinator of the Economic Reforms Office at the Ministry of Economy and Finance, this practice had been causing considerable damage to the country.
“Now, SGS will have a three-year contract to carry out the classification of minerals, defining their specificities and taking into account international reference prices. This marks a crucial change for Mozambique, which aims to recover a substantial part of the resources lost due to systematic undervaluation,” Macaringue explained.

The coordinator also highlighted another important measure: the obligation for 10 per cent of revenues from the exploitation of mineral resources to remain local. Previously, this percentage was only 2.75 per cent, but it has been increased to 10 per cent, of which 2.75 per cent goes to the specific extraction site and 7.25 per cent to the province.
SGS is scheduled to begin operations at the end of January, pending the approval of the Administrative Court (TA). This change represents a significant step towards strengthening the control and sustainable management of Mozambique’s mineral resources.

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