On Thursday, May 7, Parliament definitively approved the revision of the Mining and Petroleum Laws, stipulating that the State must now hold at least a 15% stake in mining ventures and prohibiting the sale of mineral products that have not been processed in the country.
The new laws were approved by consensus, in general and in detail, by the four parliamentary blocs: Mozambique Liberation Front (Frelimo), Optimistic People for the Development of Mozambique (Podemos), Mozambican National Resistance (Renamo), and Mozambique Democratic Movement (MDM).
According to Lusa, in the rationale for the mining bill, the government previously acknowledged that, after ten years of implementation, the current legislation has “some gaps that require strengthening the state’s sovereignty over mineral resources, necessitating the capacity to fully capture revenues from such exploitation.”
The amendments provide for the reservation of exclusive rights over strategic minerals to the National Mining Company (ENM) and the strengthening of the state’s participation in prospecting, exploration, exploitation, processing, and marketing, as well as in the capacity for oversight, monitoring, and traceability of mining activities.
The law provides for prospecting and exploration licenses valid for two to five years, which are renewable, and mining concessions valid for up to 25 years, which are extendable; it also requires that 10% of mining revenues be allocated to the development of the areas where the projects are carried out, with management handled through a fund.
Meanwhile, Podemos has previously criticized the displacement of communities from resource extraction zones without due “dignity,” noting that the new law must create job opportunities for young people.
Despite the approval, the MDM criticized opaque contracts and excessive tax benefits for multinationals, as well as resettlements that do not meet transparency criteria regarding communities displaced by resource exploitation, calling for the new model to create better conditions for these populations.
“The people ask: if we are so rich, why do the country and its people remain mired in the most abject poverty, to the point of being considered one of the poorest nations in the world? Over the decades, poor governance has become a model of natural resource exploitation that prioritizes the interests of groups and individuals linked to the political elite at the expense of the collective interest,” criticized Representative Lopes Aquino.
Renamo, too, before approving the law, criticized the government for its management and exploitation of these minerals, noting that the country remains poor due to inequalities in distribution.
“The Mozambican people have already waited too long for this revision. Mozambique’s resources should first and foremost serve the Mozambican people. Our natural resources must translate into decent schools—where no child is left sitting on the ground under a mango tree in the open air, at risk of growing up with a hunched back—and into decent hospitals,” said Maria Enoque.
Meanwhile, Podemos has previously criticized the displacement of communities from resource extraction zones without due “dignity,” noting that the new law must create job opportunities for young people.
“Mining cannot be just a business. It must be a commitment to national development, and that commitment is measured in schools built—taking children out from under the trees—in well-equipped hospitals, jobs created, and communities respected,” said Representative Mário Mangane.
The Frelimo party warned that with the new law, the era of unregulated exploitation and tax evasion is over, urging that the new legislation be studied to prevent violations. “It is clear to the people that with this revision of the law, at least 20% of the ore produced will be mandatorily retained for our domestic consumption needs, which will allow for a larger reserve of ore, such as gold, in financial transactions,” said Representative Alberto Valoi.
During the same session, Parliament definitively approved, by consensus, the revision of the Petroleum Law, which stipulates that one-quarter of the liquefied natural gas (LNG) produced in Mozambique will be made available on the domestic market for household consumption, as the government aims to “fully” capitalize on the revenues generated by these operations.
