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Legal Risk Rating
Score: 36
Severe Risk
One imagines, when reading the law, a piece of legislation being passed in a flurry with no review by an upper chamber; the law contains numerous conceptual and drafting weaknesses that one would expect to find in an initial draft of legislation (perhaps). More problematic are concepts such as listing on the local stock exchange (if holding a mining concession) and processing minerals in-country "if the economic viability justifies it". These are clear signs of legislation passed (or at least conceptualised) at the height of a commodity boom.

Regulatory Corruption Risk

Very High Corruption Potential

Corruption Exposure Risk

Very High Corruption Risk

Legal Risk Rating

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Mining Overview Commentary plus sign



Mozambique, officially the Republic of Mozambique, is located in southern Africa, bordered by Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west, South Africa and Swaziland to the south and the Indian Ocean to the east. The country became independent in 1975 after several centuries of Portuguese control; while it suffered a prolonged civil war after independence, Mozambique has enjoyed stability since the country's first democratic elections in 1994. Mozambique's economy has improved considerably since the end of the civil war, with an average growth of 7% over the last twenty years (World Bank). In spite of this a large portion of the country's population live in poverty and numerous development challenges exist including malnutrition, malaria, low levels of literacy and short average life expectancy.

Mozambique is well endowed with natural resources with predictions that these resources will result in continued economic growth over the coming years. The country produces substantial quantities of mineral sands (ilmenite and zircon), aluminium and coal, as well as beryllium and tantalum. Gold is produced in small quantities by artisanal miners.


The Mozambican Parliament approved a new Mining Law in 2014 (Law No. 20/2014)(ML), which repealed the previous Mining Law (Law No. 14/2002). The Mining Law Regulations (RML) (Decree No. 31/2015) were subsequently passed in 2015, establishing the rules for exploration and mining operations as well as regulating mining permit procedures. Other relevant legislation applicable to the industry includes the Law on the Specific Regime of Taxation and Fiscal Benefits for Mining Operations 2014 (Law 28/2014) (Mining Tax Law); the Regulation of the Specific Regime of Taxation for Mining 2015 (Decree 28/2015) (Mining Tax Regulation); the Law on Public Private Partnerships 2011 (Law 15/2011); the Regulation on the Law on Public Private Partnerships (Law 16/2012); the Regulation on the Resettlement Process Resulting from Economic Activities 2012; and the Environmental Regulation for Mining Activity (Decree 26/2004).

Several government bodies share responsibility for overseeing and regulating the mining industry in the country. The Ministry of Mineral Resources and Energy (Ministério dos Recursos Minerais e Energia) (MIREME)) is the primary managing body; it develops and implements policies relating to the industry and is also responsible for overseeing the National Directorate of Mines (Direcção Nacional de Minas (NDM)) and the National Institute of Mines (Instituto Nacional de Minas (INM)). The INM is responsible for: reviewing, analysing and approving mining projects (including the completion of technical and economic studies for the opening of new mines and the decommissioning and/or closure of existing mines); minimising the social and environmental impacts of mining projects; publishing guidelines on public and private sector participation in the mining sector; and the development and proposal of new policies to MIREM concerning the development of the mining industry. The responsibilities of the NDM include the development of policies for the mining sector; the regulation and monitoring of mining projects; and the administration of the granting of licences and concessions. In addition the ML also provides for the Inspectorate-General of Mineral Resources (Inspecção-Geral de Recursos Minerais), which is responsible for ensuring the observance of the ML and all other relevant legislation (Art. 14, ML). While Mozambique’s Council of Ministers (a body which includes the president, prime minister and the other government ministers) is ultimately responsible for the granting of concessions and mining licences, this process is mainly administered and managed by the NDM.

According to Article 98 of the Mozambique Constitution (1990) natural resources in the soil and subsoil are the property of the state, a fact which is reiterated in Article 4 of the ML.


Applications for Prospecting and Exploration Licences and Mining Concessions may be granted on request or through a public tender process (Reg. 21, RML). According to the ML, mining titles may only be granted to Mozambican citizens or legal entities constituted in accordance with Mozambican legislation, which have proven financial and technical capacity (save for mining passes and commercialisation licences).

The key forms of mineral titles provided for in the ML are: 

  • Prospecting and Exploration Licences: grant the holder the exclusive right to prospect for minerals in the concession area and undertake research activities. Licences are valid for a period of five years and are renewable for a further three-year period (Art. 39, ML) for all mineral resources besides construction minerals which are valid for two years, renewable for a further two years. The holder of a Prospecting and Exploration Licence may request an enlargement of the area upon renewal (Reg. 41, RML) subject to the maximum licence area not being exceeded (198 hectares in respect of construction minerals and 19,998 hectares in respect of all other minerals (Reg. 35, RML)). From the end of the second year of the licence onwards the licence area must be progressively reduced, though the RML is not clear on the extent of such reductions (Reg. 42, RML). Licence holders must submit annual reports detailing expenditure and activity (see Reg. 40 and Annex 11, RML), as well as a work programme and budget for the following year.


  • Mining Concessions: are necessary for mineral extraction, development and production. Concessions may be granted for a period of up to 25 years, and may be renewed for an equal period, taking into account the useful economic life of the mine (Art. 42, ML). Applicants for a Mining Concession must submit a feasibility study, production plan and proof of technical and financial capacity to the MIREME alongside a variety of other information. The holder of a Mining Concession must, by 30 March of each year, submit a work programme and budget for the operations of the following year, as a well as a plan for the sale of minerals. Concession holders must submit monthly, quarterly and annual reports on the production and sale of mineral products (see Reg. 56.2, RML).


Other forms of mineral title are available for small-scale operations (mining certificates and mining passes), as well as processing and treatment licences.

The transfer of a mining title may only take place two years after the beginning of mining activities, subject to the approval of the government (Art. 62, ML).


Article 12, ML indicates that pre-existing land users are entitled to fair compensation where land is required for mining operations; fair compensation for areas where families or communities are established must be determined by agreement of the government, the community and the company. In addition, Decree 26/2004 requires those who carry out Level 3 Activities (Category A projects as per the ML) conclude agreements with local communities in respect of the “methods and procedures for the management of environmental, biophysical, socio -economic and cultural areas for the duration of the project and after it is disposal” (Art. 28, Decree 26/2004).

Mining taxes and fees are provided under the Mining Tax Law and Mining Tax Regulation. According to Chapter II, Section I, a mining operator shall pay a mining production tax calculated by reference to the value of minerals extracted and by reference to third party sales (which are required to reflect the international market price for the commodity) (Art. 10, Mining Tax Law). The Mining Tax Law also outlines the fees payable for annual taxes based on surface area, which will depend on the licence held. Under Article 65 of the Regulation on the Law on Public Private Partnerships 2012, the state is granted the option of a 5% free carried interest. Non-compliance with the payment of the taxes may result in revocation of the licence or permit (Article 64, ML). Tax stability agreements over a ten year period may be negotiated in respect of investments over $100 million (USD).

For environmental impact assessment (EIA) and environmental licensing purposes mining activities are classified into three categories with varying environmental management requirements applicable.

Exploration and mining activities must be undertaken in accordance with an approved work plan/programme (Reg. 35.1(h), ML). The RML prescribes the content of exploration plans (see Reg. 102, RML) and mining plans (see Reg. 47, RML). Production must be maintained in accordance with the approved work plan and amendments to work plans must be approved by the INM (Reg. 52.4, RML).

The ML has numerous additional provisions that will prove troublesome to investors, including local stock exchange requirements, local participation matters, the use of “mining-contracts” by the state and production and employment obligations.


See Mozambique - Environmental Overview Commentary.


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Mozambique, officially the Republic of Mozambique, lies in the southeast corner of the African continent with Tanzania, Malawi, Zambia, Zimbabwe, South Africa and Swaziland bordering. On the country’s eastern shoreline lies the Indian Ocean with the Mozambique Channel separating the country from Madagascar.

Mozambique is divided into two sections by the Zambezi River which runs east through the country to the Indian Ocean; in the north of the country is a large plateau with mountains in the west, while in the south are coastal lowlands and vast open plains. The country has a tropical to subtropical climate. There are slight variations between the north and south of the country but generally speaking October to March is considered to be the wet season, with the dry season running from April to September. The varied topography and climate have resulted in a variety of vegetation with areas of savannah, forestland, woodland and mangroves all found in the country. Amongst Mozambique’s diverse wildlife are water buffalo, elephants, lions, leopards, cheetahs, hippopotamus, antelopes and monkeys, as well as a variety of birds, including flamingos, cranes, storks, herons and pelicans.

While Mozambique’s environment is considered to be in a relatively good condition based on global standards, the country still faces environmental challenges which are common to the region including deforestation, habitat loss due to human activity, pollution and illegal poaching.


Mozambique’s main environmental legislation relevant to the mining sector is Decree No. 26/2004 on Environmental Regulation for Mining Activity (Decree 26), as well as Ministerial Order 129/2006 (General Directive on Environmental Impact Assessment). The Ministry of Land, Environment and Rural Development (Ministério da Terra, Ambiente e Desenvolvimento Rural) (MITADER) is responsible for implementing, monitoring and coordinating environmental policies, as well as promoting the rational and effective use of the natural resources of the country. At the national level the MITADER is responsible for issuing an environmental licence, while the Provincial Directorates for the Coordination of Environmental Affairs (Provincial para a Coordenação da Acção Ambiental (DPCA)) are responsible at the local level. Ministerial Order 198/2005 requires that environmental licence applications for large-scale mining projects be made to the relevant local authority prior to submission to the Environmental Impact Assessment National Directorate (Directorate).


With respect to environmental permitting of mining projects, Article 69 of the Mining Law indicates that different levels of environmental scrutiny are required for different activities: an Environmental Impact Study is required for a project falling under Category A, a Simplified Environmental Impact Study is required for activities falling into Category B and an Environmental Management Programme is required for activities included in Category C. Mining activities are classified as Category A if they relate to mining activities carried out under a mining concession; Category B covers mining activities in respect of quarries, prospecting and exploration activities, and small-scale mining activities pursuant to a mining certificate; Category C includes activities carried out under a mining pass (very small scale community mining activities) and non-mechanized prospecting and research activities.

There is some inconsistency between the Mining Law and Decree 26. Decree 26 segments activities into Levels 1, 2 and 3. Level 1 concerns low impact activities, including reconnaissance activities and non-mechanised prospecting and research activities, which do not require an EIA process or EMP but must observe the prescribed basic standards of environmental management; Level 2 concerns activities requiring an Environmental Management Plan, including quarrying, mining activities for construction purposes, and mechanised prospecting and research activities; and Level 3 concerns all mining operations not falling within Level 1 and 2, which require an EIA study. Nevertheless, Decree 26 is specific as to environmental licensing for mining projects and should be followed with respect to the administrative and procedural requirements.


  • EIA Process: the mining operator must first submit a general document outlining the project and the preliminary environmental issues arising from it; the study may only be submitted to the Directorate after the local authority decision (Art. 1.2, Ministerial Order 198/2005). Once the pre-feasibility study has been assessed and appropriate terms of reference outlined, the EIA is prepared and submitted to the same authority and a mandatory public consultation is carried out. A Technical Committee will be established to review the pre-feasibility study and the EIA. The recommendation of the Technical Committee is submitted to the local or central environmental authority, which then issues or refuses the environmental licence (see Decree 45/2004, which is relevant by virtue of Art. 9, Decree 26.). The mining operator must present a mining plan for the area of impact and complete an EIA during the preparation of the feasibility study; the EIA should include an environmental management plan and an emergency response programme (Art. 8, Decree 26). The Environmental Management Plan must be renewed every five years (Arts. 10.3 and 13.3, Decree 26).


  • Environmental Management Plan (EMP): The process for the EMP is similar to the EIA, except that the preliminary study is not required and public consultation is discretionary. The recommendation of the Technical Committee is submitted to the DPCA, which issues or refuses the environmental licence. Decree 26 indicates that the EMP should be submitted with the application for mining rights (Art. 11.3, Decree 26). The environmental plan for this type of activity is valid for a period of ten years (Art. 11.5, Decree 26).


According to Article 20 of Decree 45/2004, where an activity covered by an environmental licence is not commenced within two years the licence shall be revoked. It is unclear if this applies to mining projects governed by Decree 26, but it is likely the case that it does since certain other procedural aspects of Decree 45 operate.

Developers are also required to submit a decommissioning plan for approval by Mozambican authorities and provide financial guarantees to cover decommissioning costs (Art 71, ML). A security deposit must be provided to cover the financial costs for rehabilitation for Level 2 and 3 activities (Art. 24.1, Decree 26).

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