July 6, 2011 / 5:10 PM / 8 years ago

Mozambique planning new mining law: minister

MAPUTO (Reuters) - Mozambique plans to overhaul its mining laws and is in talks with miners and other interested parties on the changes, Mining Minister Esperanca Bias told Reuters on Wednesday.

Bias said in an interview that current laws may be revised by the end of this year.

“We are discussing a new mining law. We are discussing with all stakeholders and we will not take a decision only from the government’s side,” Bias told Reuters.

Talks with mining firms, affected communities and civil organisations began about three months ago.

Among the issues being discussed were timeframes for mining production to start and for the government to receive royalties from mining.

“If the company says it will take two years to start production, I want that company to start production in two years. If the company must pay royalties, I want to have these royalties. If we can have 5-10 percent (royalties), why not? But we will not do anything without discussing with the companies”.

The revision has not been concluded yet.

“I am talking about getting a percentage in coal mining, in uranium and gold and other minerals. But we haven’t concluded the revision yet, we are having discussions.”

It was not clear if this meant existing taxes such as those levied on production would be increased.

Mozambique levies a 35 percent corporate tax on miners currently and royalties are low. Miners are also subject to a production tax of 10 to 12 percent for diamonds and 3 to 8 percent for other minerals.

Unlike other countries in the region, Mozambique has no local ownership or equity requirements for miners and it is unclear if that could be subject to change.

Asked when the law could be revised, Bias said: “Maybe at the end of this year”.

Mining accounts for less than 5 percent of Mozambique’s economy despite large deposits of coal, tantalum, gold and other minerals, according to the government.

Mining companies active in Mozambique include Riversdale Mining, Kenmare Resources from Ireland and London-listed Ncondezi and Noventa.

In 2010, some $1 billion were invested in Mozambique’s mining sector with more than half of that in mineral exploration and the rest in oil and gas.

The government issued around 1,000 licences for exploration of minerals and 13 licences for energy exploration.

Officials have said among the aims of the revised law would be faster licensing procedures and simplification of requirements for mining groups to operate in Mozambique.

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