Maputo, Mozambique — MININGREVIEW.COM — 23 November 2011 – Mozambique mining resources minister Esperanca Bias has soothed investor fears that the southern African country would follow the example of Zambia and Ghana by increasing royalties or taxes on mining projects.
“We are not changing the tax regime,” she said in response to questions at the Mozambique Coaltrans conference here. “This regime was approved by a specific law in 2007. If we think of a change, we would invite our partners to give their contribution or inputs,” she said, adding that there were other ways of extracting value from mining projects.
Earlier this month, newly elected Zambian president Michael Sata made good on pre-election promises by lifting royalties on mining companies to 6%, while Ghana, in its recent budget announcement, proposed lifting the corporate tax rate on miners from 25% to 35%, while a separate 10% tax on windfall profits would be introduced.
“What we want is Mozambique to draw benefits from resources which would not be through higher taxes but through value addition “’ the creation of industries, for example, such as fuel from coal,” Bias said.
She went on to reveal that a number of mining law changes were being legislated, possibly by the year-end, including cutting the long lead times before exploration is turned into production.
Currently, it can potentially take up to 18 years from when an exploration company is presented with a licence to prospect, before minerals are actually produced. “A major objective of the legislation is to adjust the research periods. We think it is possible to reduce these time frames,” Bias said.
She added that a mining certificate would be granted exclusively to Mozambicans which would allow them to produce minerals at the same time as prospecting for them on the same licence.