Mozambique’s mining industry has been an important driver of economic growth over the last two decades. The Mozambican President of the Chamber of Mines (CMM), Geert Klok, recently argued that with vast mineral resources, including heavy sands, coal, magnetite, graphite, lithium, gold and precious stones, the country offers a promising scenario for mining investments.
According to an article made public last Friday, June 7, by the Mining Weekly news portal, the official pointed out that, despite the challenges, Mozambique continues to attract international interest and aims to strengthen its position as an important mining centre in southern Africa. ‘Most of the country’s mineral wealth remains untapped, which offers many opportunities for new operators entering the sector,’ said Geert Klok, adding that the country’s strategic location on the Indian Ocean coast, with a coastline of 2,500 kilometres, increases its attractiveness and export potential.
In addition, continued the source, well-established transport corridors, such as Maputo, Beira and Nacala, link Mozambique to neighbouring countries, facilitating the movement of goods and resources. The country also benefits from the experience and mining suppliers available in neighbouring South Africa – a long-established mining jurisdiction – further strengthening the national mining ecosystem.
Mining Weekly explains that it is for these reasons, as well as others, that CMM advocates taking a long-term view and proper planning when it comes to implementing ancillary legislation ‘so that the rules of the game are not changed to the detriment of the industry’.
Geert Klok explained that Mozambique’s mining legislation was designed to provide stability and attract long-term investment. The current Mining Law, which came into force in 2014, replaced the 2004 Mining Law, establishing a stable core of mining regulations.
Machines at work in a mine
Similarly, in 2022, the government introduced the Package of Economic Acceleration Measures (PAE) to improve the business environment. ‘These measures aim to reduce bureaucracy and increase economic efficiency, although specific initiatives are still needed to strengthen the mining sector,’ he pointed out, adding that the CMM has called for the mining industry to be included in future economic packages, emphasising the importance of addressing the industry’s specific challenges.
In general, the source noted that mining companies welcomed the government’s efforts to improve the business environment. However, he noted that there are still concerns about the implementation of certain measures.
By way of example, Geert Klok referred to the decree on reference prices for natural resource exports, introduced in 2023, as having been met with controversy. In this regard, CMM emphasised the need for a more efficient mining cadastre and the resolution of tax issues, such as value added tax refunds and reference price bottlenecks.
‘Improvements are needed in the mining cadastre of the National Mining Institute (INAMI), with the aim of speeding up licence application processes, reducing fees and simplifying share transfer approvals,’ stressed Geert Klok.
Future prospects
Regarding the future, the CMM president told Mining Weekly that the country’s graphite and lithium sectors have significant potential. Mozambique is currently home to two graphite mines – Balama and Ancuabe, with the former having an annual production capacity of around 350,000 tonnes.
Located in Cabo Delgado province, the Balama mine is allegedly one of the largest natural graphite mines in the world. ‘Despite being the third largest graphite producing region in the world, Mozambique’s actual production is less than a third of its installed extraction and processing capacity, which indicates substantial room for growth,’ noted Geert Klok, lamenting the fact that the development of new graphite mines is hampered by oversupply in the market and security concerns in Cabo Delgado province.
Although lithium mining in Mozambique is in its infancy, he argued that the process ‘is very promising’, as evidenced by the recent entry of explorer and promoter Decan Gold Mines, listed on the Bombay Stock Exchange, with its acquisition of a majority stake in five lithium blocks in Mozambique.
Mining operations
The source said that in order to increase the benefits of its mineral resources, Mozambique is considering policies to promote local industrialisation. One of the proposed strategies is to ban the export of unprocessed minerals, although Geert Klok notes that concrete policies and legislative proposals in this regard have yet to be made public.
‘CMM emphasises the importance of developing these strategies in collaboration with the mining industry to ensure competitiveness,’ he said, also stressing the need for support infrastructures and human resources: ‘the discussion must shift to what Mozambique, as a country, can do to enable a competitive national industry based on its mineral sources.’
The CMM president said that his organisation is actively working to raise awareness of the mining industry’s contributions to the economy and to advocate for measures that encourage growth. “The formal part of the mining industry already directly employs more than ten thousand people. If growth is encouraged, it could employ more people, multiplying the current figure,’ he noted.entry of Mumbai Stock Exchange-listed explorer and developer Decan Gold Mines, with its acquisition of a majority stake in five lithium blocks in Mozambique.
Geert Klok explained that, in addition, the expansion of infrastructure such as roads, electricity supply and railways is crucial to unlocking the country’s full potential. “Although Mozambique’s mining sector presents numerous opportunities, realising its full potential requires resolving existing challenges and implementing supportive policies. The collaborative efforts of the government, industry stakeholders and CMM will be key to fostering an environment conducive to sustained growth and investment in the mining industry,’ he concluded.
