MAPUTO — Mozambique will this year launch a bidding round for new coal prospecting and mining licences in its central Tete province, where Vale and Rio Tinto have already started production, its deputy mines director said.
That will be a departure from the usual process of awarding mineral rights on a first-come, first-served basis via an online application system, Geraldo Valoi said.
“We plan to do an international bidding for the restricted area in Tete,” Valoi said.
Applications for other minerals and coal outside Tete will be accepted in the usual online system again from the end of April after a three-month halt to upgrade software.
The former Portuguese colony has seen a flood of foreign investment on the back of a boom in its coal mining sector and is now estimated to be home to some of the world’s largest reserves of coking coal, used in steelmaking furnaces.
Mozambique’s coal output is expected to jump to around 40 million tonnes a year in five years’ time and 100 million in a decade.
Valoi said the first-come, first-served approach made sense when offering blocks in a new area for which there was no data, but the bidding process would ensure that a company with the right credentials and development plan was chosen.
“Otherwise you end up with speculators that get the license because they were first in the system, but who only plan to resell that licence,” he said.
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There were some 1 600 prospecting and mining licences, half of which were coal licences. Valoi said many licences had to be revoked from a previous total of 5 000 after miners gave up on projects or failed to deliver on their development plans.
Valoi said changes to the mining law under discussion would be small and seek to streamline procedures rather than add further hurdles. The new proposals should be passed in the first half of this year.
He said the Mineral and Finance ministries were developing guidelines on how to tax mining deals when one company sold its stake or was bought by another — as happened when Rio Tinto bought explorer Riversdale.
“After that deal everyone wanted to shout at us asking why we hadn’t done anything. We are studying how other countries are doing it,” he said, adding the revenue service was checking if it could be applied retrospectively on Rio’s $4-billion deal.
