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Mozambique in International Arbitration Battle Over Mining License Dispute

Mozambique in International Arbitration Battle Over Mining License Dispute

The country is involved in an international arbitration battle over a mining license dispute. According to the Mozambique Mining Journal, two unidentified natural resource companies have filed a lawsuit against the government with the International Center for Settlement of Investment Disputes (ICSID), an arbitration institution affiliated with the World Bank (WB).

According to the information released on Tuesday (19), the crux of the dispute revolves around a mining license that was allegedly revoked without the proper legal channels.

“The applicants claim that their license was transferred illegally and without their consent to an entity unrelated to them, but controlled by their Mozambican partners. This alleged act of expropriation was further aggravated when the same license was transferred to a Chinese state-owned company, TZM Resources, in December 2020,” revealed a source quoted by the news outlet, stressing that the aggrieved companies are no strangers to legal recourse, and clarifying that “in 2012, they obtained a favorable verdict in the High Court of England and Wales. However, their attempts to enforce this decision in Mozambique have been unsuccessful”.

“The ramifications of this case go beyond the immediate dispute. The outcome of this arbitration will be closely watched by international investors. A ruling against Mozambique could potentially deter future foreign investment in the country’s mining sector, especially for those who are wary of potential legal obstacles,” he explained.

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The publication revealed that the Executive has not yet commented publicly on the specifics of the case, stressing that it has only reiterated the country’s commitment to defending the state and resolving disputes through established legal channels.

“The arbitration process is expected to be lengthy and complex. The final verdict of the ICSID tribunal could have significant financial implications for the country, potentially amounting to millions of dollars. More importantly, it could cast a shadow over Mozambique’s attractiveness as an investment destination, especially in this sector,” he concluded.

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