Maputo — The Irish company Kenmare Resources, which has been mining the heavy mineral sands in Moma and Larde districts, in the northern Mozambican province of Nampula, has announced that the Council of Ministers (cabinet) has approved a 20-year extension for its operations in the country.
According to Miningmx, citing Kenmare's statement addressed Mozambique' stock exchange, agreement for the processing and export of heavy sands by Kenmare will run in until 2044.
Royalties based on gross revenue will increase from one to three percent between 2025 and 2029, to four percent between 2030 and 2034, and to five percent between 2035 and 2044. Certain services contracted abroad are subject to a 20 percent withholding tax.
"The company commits to investing at least 200 million dollars in equipment and infrastructure, plus an additional 50 million dollars in social projects, during the extension period", said Kenmare Managing Director Tom Hickey, cieted in the document.
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He also downplayed the additional burden of the 200 million dollar commitment.
Hickey noted that the spending on the community is also in line with Kenmare's current practices. Mozambique may purchase up to 20 percent of the annual production, at market prices, for local processing.
For now, the addendum remains to be signed and submitted to the Administrative Tribunal, the body responsible for checking the legality of public expenditure. This agreement is separate from the mining concession, which remains in effect until August 2029.
Hickey emphasized that these are administrative steps, not a new round of negotiations. "This does not require any negotiation. It does not reopen negotiations", he said.
The agreement also provides for the possibility of a further 20-year extension starting in 2044, although such a renewal would be subject to the terms of the legislation in force at that time.
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