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Mozambique uses its concession rights as early fiscal incentives expire
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10th August 2012
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JOHANNESBURG (miningweekly.com) – The Mozambican government has acquired a 5% share in the Moatize coal project, owned and operated by Brazilian mining major Vale. This has been revealed by the country’s Mineral Resources Minister, Esperança Bias.

This 5% share in the project is held by the State-owned Mozambican Mineral Exploration Company, which was recently created to safeguard the country’s interests in coal (and other mining) projects. Minister Bias did not reveal the cost of the acquisition.

“It is our objective to guarantee a Mozambican interest, even though minority, in the great enterprises in the sector, including coal and hydrocarbons,” she explained.

The government in Maputo now intends to acquire a similar stake in Rio Tinto’s Benga project which, like Moatize, lies in the country’s Tete province. Rio Tinto is the world’s third largest miner by market capitalisation.

The concessions granted to these mining groups allow the Mozambican State to acquire a shareholding of up to 25% in these major projects, and this right is maintained by the government.

However, the government plans not to hold all of the shares it is entitled to, but to transfer some to Mozambican businesspeople and companies, who would not have the financial resources to acquire such shareholdings directly.

In addition, Planning and Development Minister Aiuba Cuereneia has reported that the “excessive” fiscal incentives awarded to foreign investors to attract large-scale investments to the country were coming to an end.

“Since the year 2007 we have had a new law which significantly reduces the incentives for megaprojects, principally in the mineral extraction area,” he said. “Regarding earlier projects, such as Sasol, Mozal and Kenmare, most of these are in the last phase of the fiscal benefits which they were granted, which means that some are already paying, or will start paying, the Treasury in the near future.”
 

Edited by: Creamer Media Reporter

 

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Esperança Bias
 
Picture by: Bloomberg
Esperança Bias