Mining In Mozambique And Zambia

Keywords: Mozambique, Mining rights, exploration licence,

Mozambique is one of the largest producers of aluminium, beryllium and tantalum, whereas the Zambian economy is heavily dependent on copper and cobalt. Both countries have huge investment opportunities for mining companies however, before doing business in either country; there are a number of key legal issues which businesses must be aware of.

Mining rights

Mozambique: Under the Mining Law (Law No. 14/2002, of 26 June 2002), mining rights are to be issued on a first come, first served basis. A company which spots a mining opportunity in Mozambique should therefore act quickly.

The five types of titles/permits which can be obtained are: reconnaissance licence, exploration licence, mining concession, mining certificate and mining pass. The most important of these for medium and large scale projects are the exploration licenses (for the exploration phase) and the mining concessions (for the mining/production phase). Exploration licences are granted for five years and can be renewed for a further five years, while mining concessions are granted for up to 25 years and may be extended by a further 25 years. The Mozambican government however is concerned about concessions being awarded without subsequent activity taking place and one reform proposal recently put forward is that mining concessions should be revoked where there is no activity, and their holders restricted from receiving further licences. Another reform proposal is for the state to have a share in companies which are granted mining concessions. At the time of writing, the mining legislation in Mozambique was under review and so it remains to be seen whether the above proposals will be implemented.

Zambia: Under the Mines and Minerals Development Act, No. 7 of 2008, the seven types of mining rights which can be obtained are: prospecting licence, large-scale mining licence, large-scale gemstone licence, prospecting permit, small-scale mining licence, small-scale gemstone licence and artisan's mining right. One protectionist measure taken by the government has been to reserve prospecting permits, small-scale mining licences, small-scale gemstone licences and artisan's mining rights for Zambian citizens or Zambian citizen owned companies (50.1% ownership) only. Large foreign mining companies can however take comfort from the fact that they are permitted to apply for the two licences most likely to be relevant to their operations...