Mozambique suspends Tete licencing

Monday, 27 Feb 2012

Reuters reported that Mozambique will not issue any more new coal prospecting licenses for its Tete province, where the likes of Rio Tinto and Vale have started a global rush in search for coking coal.

The former Portuguese colony has seen a flood of foreign investment on the back of a boom in its coal mining sector, with Tete estimated to hold one of the world's largest reserves of coking coal, used in the production of steel.

Those not already active in the country have been setting up offices in the southern African country, hoping to get a foothold there via future licensing rounds.

Mozambiue national mining inspector Mr Afonso Mabica told Reuters that “Tete is now overloaded with coal projects. We now want to concentrate on the existing licenses and projects. If we find companies which are not complying or giving up, we will take their licenses back. Eventually, we can decide to issue new licenses.”

The decision will not affect those who already hold a prospecting licence and who will eventually need to get a mining permit as their projects advance.

Official figures show some 112 coal licenses had been issued to 45 national and international companies for the Tete province. So far only Vale has begun exporting coal.

Earlier the minister for mineral resources said that a new mining law, which will go for approval in April, will not propose any changes to the current tax regime and any changes will be small and seek to streamline and simplify procedures rather than erect additional hurdles for investors.

Ms Esperanca Bias told a news conference that “The new mining law will not tamper with taxation. There is no need because we charge the same tax that is charged in the region, in the specific case of coal it is 3% of revenues.”

She said it would be unfair to change the taxes when apart from Vale the mining firms had yet to get any returns on their investment in the country.

(Sourced from Reuters)