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I. Introductory Note
The Republic of Mozambique is rich in mineral resources, including oil, gold, mineral water, coal, natural gas, and marble, and even though exploitation of these resources is far below desired levels, the mining sector still contributes to just under 2% of the country’s GDP.
The government has shown interest in encouraging national and foreign investment in this area by removing obstacles and by creating tax benefits and diversifying the legal mechanisms through which Mozambican and foreign investors can take part in mining operations in Mozambique.
II. Applicable Legislation
The legal framework currently in force in the Republic of Mozambique for this sector essentially seeks to regulate the various mining titles provided for under the law for exploiting mineral resources, the formalities for their concession and respective time periods, as well as the rights offered to investors who wish to work in this sector.
There are currently four essential pieces of legislation in force in this regard: Law no. 14/2002 of 26 June (“Mining Law”) and Decree no. 62/2006, together with its appendixes, approving the “Mining Law Regulations”, which in turn regulate the rights of investors and the requirements and formalities related to mining, along with Law no. 11/2007 and Law no. 13/2007 of 27 June, which have changed some important aspects of tax legislation and mining sector tax incentives.
a) Mining Titles and Permits
The exploitation of mineral resources requires granting of the right of usage and benefit through the issue of mining titles which grant a permit to engage in a particular type of mining.
The rights of reconnaissance, prospecting, research, and exploitation of mineral resources are thus granted through one of the following mining titles and permits:
(i) Reconnaissance Licence
(ii) Prospecting and Research Licence
(iii) Mining Concession
(iv) Mining Certificate
(v) Mining Pass
(i) Reconnaissance Licence
The reconnaissance licence can be granted to any individual or legal person of Mozambican or foreign origin.
It is granted for a maximum non-extendable term of 2 years. During the validity period of the licence, its holder may relinquish it, subject to prior notice of at least than 90 days addressed to the minister in charge of mining. The area for which the reconnaissance licence can be granted shall not exceed 100,000 hectares.
Under this licence the holder can acquire the right of access to the area, enter it or fly over it to undertake reconnaissance (without exclusivity), which means that other investors can also access the same area. The licence also entitles the holder to occupy the land and construct the necessary installations for undertaking reconnaissance, obtaining and removing samples, using water, wood and other materials necessary for reconnaissance. The reconnaissance licence is personal and non-transferable.
Applications for reconnaissance licences shall be addressed to the minister in charge of mining (currently the Minister of Mineral Resources) and must be submitted to the National Mining
Miguel Spínola [email protected]
Dipak Chandulal[email protected]
Department or the Provincial Department of Mineral Resources with jurisdiction over the respective area. The applicant will be informed of the decision regarding the request within a maximum period of 10 days following a favourable order from the Minister of Mineral Resources.
(ii) Prospecting and Research Licence
The prospecting and research licence can be granted to any individual or legal person of Mozambican or foreign origin.
It shall be granted for a period of 5 years, renewable for an equal period of time and the respective application shall be addressed to the minister in charge of mining, in addition to being submitted to the National Mining Department or the Provincial Department of Mineral Resources with jurisdiction over the intended area for registration and processing. The area for which the prospecting and research licence can be granted shall not exceed 25,000 hectares.
The applicant will be informed of the decision in the request within a maximum period of 10 days after being adopted.
In the event of overlapping requests for the same area, the prospecting and research licence shall be awarded via public tender and the National Mining Department shall be responsible for conducting the process, establishing the rules, time periods and other terms and conditions applicable to the public invitation to tender.
The exploitation of mineral resources requires granting of the right of usage and benefit through the issue of mining titles which grant a permit to engage in a particular type of mining.
The holder of the mining concession may not initiate his activities before obtaining an environmental licence and a land usage and benefit permit; such licence and permit must be obtained within three years of the date of issue of the mining concession.
Under the prospecting and research licence the investor acquires the sole right to research the mineral resources covered by the licence and undertake the necessary work for achieving this objective; to collect, remove and export examples and samples; under authorisation, to sell examples and samples obtained for prospecting and research, as well as to occupy the land and construct the temporary installations necessary for prospecting and research. The prospecting and research licence is transferable under the provisions of applicable legislation.
Subject to prior authorisation, this title can be transferred to a Mozambican individual or legal person domiciled in Mozambique, and the transfer request must be addressed to the minister in charge of mining and submitted to the National Mining Department. A decision will be reached regarding the application within a period of 90 days from the date of its submission.
(iii) Mining Concession
The mining concession may only be granted to legal persons registered in Mozambique. This means that an investor who wishes to acquire a mining concession shall be obliged to establish and register a company in the Republic of Mozambique.
The mining concession application shall be addressed to the minister in charge of mining and submitted to the National Mining Department or the Provincial Department with jurisdiction over the intended area for registration and processing. The decision on the request shall be communicated to the applicant within a maximum period of 10 days after the issued order.
The requested mining concession shall be granted immediately when the application ensues as a result of a prospecting and research licence and the respective holder has fulfilled his obligations.
The mining concession shall be granted for a period that is based on the economic lifespan of the mine or the mining operations, but may not exceed 25 years, and is subject to renewal for an equal period. The intended area may not exceed the area necessary for mining operations.
The holder of the mining concession may not initiate his activities before obtaining an environmental licence and a land usage and benefit permit; such licence and permit must be obtained within three years of the date of issue of the mining concession.
The mining concession grants the holder the right to use and occupy the land and, on an exclusive basis, to exploit the mineral resources identified in the research phase and undertake the necessary works; to sell or otherwise dispose of the mineral products resulting from mining operations. The holder of the mining concession shall also be entitled to request and be granted the title of usage and benefit of the land in accordance with applicable land law legislation.
This title is transferable under the same terms as the prospecting and research licence.
(iv) Mining Certificate
The mining certificate may be granted to any individual or legal person domiciled in Mozambique, including both Mozambican nationals and foreigners, having legal capacity, as well as any cooperative or family capable of undertaking operations authorised under this mining title.
It shall be granted for a maximum period of 2 years, extendable for successive periods of no more than two years, provided that the mining operation underway justifies this and within an area that does not exceed 500 (five hundred) hectares.
The mining certificate request shall be addressed to the National Mining Department for registration and processing or to the respective Provincial Department responsible for the intended area, according to each particular case. The decision shall be communicated to the applicant within a maximum period of 15 days. The mining certificate shall be transferable under the law.
The mining certificate shall grant the respective holder the right to the following within the certificate area: to occupy, use the land and undertake small scale mining operations, on an exclusive basis; to sell or otherwise dispose of the products resulting from mining operations; to apply for a mining concession.
(v) Mining Pass
This title can only be granted to individual persons of Mozambican nationality with legal capacity enabling them to undertake the operations permitted by this title.
Under this mining pass the holder acquires the right to undertake small-scale mining activities.
The mining pass is non-transferable.
b) Mining Contract
Mozambique law stipulates that in exceptional circumstances the Mozambican government may sign a mining contract with a holder of a prospecting and research licence or mining concession in accordance with the scale of the project in question.
c) Abstraction of Mineral Water
The abstraction of mineral water, an abundant resource in the Republic of Mozambique, is carried out under a prospecting and research licence and mining concession within an area that does not exceed 80 hectares for a period of 1 year, extendable by no more than 1 year.
The mineral water concession application may be submitted by any legal person established and registered in Mozambique, regardless of whether or not the request ensues from a prospecting and research licence.
The holder of the mining concession may not initiate his activities before obtaining an environmental licence and a land usage and benefit permit; such licence and permit must be obtained within three years of the date of issue of the mining concession.
The mining certificate request shall be addressed to the National Mining Department for registration and processing or to the respective Provincial Department responsible for the intended area, according to each particular case.
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