Nampula (Mozambique), 1 Apr (AIM) – Mozambique has undergone profound changes over the past 20 years, including the expectations and vision of citizens towards the exploitation of the country’s mineral resources, and this must be taken into account when renewing the contracts of the mega-projects, said President Daniel Chapo on Sunday.
Asked by reporters in the northern city of Nampula about the delay in approving a new contract for the Irish company Kenmare Resources, which is mining heavy mineral sands in the coastal districts of Larde and Moma, Chapo replied “It may look like a delay, but it’s not a delay as such”.
“There are contracts that were signed 20 years ago”, he said – citing the cases of the Mozal aluminium smelter, on the outskirts of Maputo, the processing of natural gas by the South African petro-chemical giant Sasol in Inhambane province, and Kenmare’s mining operations.
“Since these contracts were signed 20 years ago, now we need to renew them”, said Chapo. “But Mozambique isn’t the same as it was 20 years ago. We don’t have the same number of people, and we don’t think in the same way. We don’t have the same goals or the same interests. There are changes and there are also challenges. In any part of the world, including Mozambique, when a contract needs to be renewed, the clauses to be renewed must be discussed. What we are doing right now is discussing the clauses of the contract, so that it is not exactly the same contract that is being renewed”.
In negotiating the clauses of the contract, each side has its own interests to defend, added Chapo. “Naturally, Kenmare will try to defend its interests, and the Mozambican government will defend the interests of the Mozambicn people”, he said.
“In this defence, we have been taking all this time, which may look like a delay, but it isn’t”, Chapo continued. “Kenmare is defending its interests, because it is an investor, and it wants a return on its investment”.
Also entering this equation are questions of corporate social responsibility, said Chapo – which means the responsibility the company has towards the communities where it is developing its mining projects.
Chapo noted that communities in Larde are demanding greater responsibility from Kenmare. Other challenges concerned the level of local content used by Kenmare and other mega-projects.
Hence the government is negotiating with the company, and as soon as the government and Kenmare have reached agreement, the new contract will be submitted to the Council of Ministers for its approval.
“Certainly the contract will be renewed”, said Chapo. “But because there is no conflict and no problem, Kenmare never stopped operating. It is continuing to operate because the contract is being negotiated peacefully between the two sides”.
The Kenmare dredge mine in Larde provides titanium minerals including ilmenite, rutile and zircon, exported to markets in China, the United States, Europe and Saudi Arabia.
Recently, the general manager of Kenmare in Mozambique, Gareth Clifton, said the company contributes five per cent by value of the country’s exports.
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