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Extractive industry: The goal is to give an edge to Mozambicans – Noormahomed

By Pietro Musilli in Maputo
Posted on Friday, 19 July 2013 10:38

The Africa Report: What is the timeframe for Mozambique’s new mining and oil and gas laws?

Abdul Razak Noormahomed: We have finished internal discussion of the mining law and have the approval of cabinet. It is being discussed in this parliamentary session [March-May]. We hope it will be passed by mid-2013. The oil and gas law, hopefully, will be passed this year.

What will change under the new mining law?

We are going to reduce the time for exploration. At the moment, exploration can last five years with the possibility to extend it five more. [Under the new law] the limit will be eight years – five years, plus three. From the moment a company takes the concession, the time limit for it to start production will be reduced from three years to one. The goal is to get the most dynamic companies with more knowhow, more technical competence and financial capacity that can reach the goals rapidly.

The blocks will be smaller so more companies can work the entire block more rapidly

On the other hand, mining concessions for locally owned companies that used to be for one year are going to be extended to five years. The mining certificate for small-scale operations by locals is also going to be extended from two to five years. The goal is to give an edge to Mozambicans to develop a local mining industry.

Is the 2011 mega-projects law going to affect the mining sector?

The mega-projects law will have an influence on the extractive- sector law. The transparency of contracts, for instance, and the percentage of Mozambican participation in projects must be con- sistent with the mega-projects law.

The mega-projects law talks about Mozambican participation of between 5 percent and 20 percent. Will this work through shares on the Maputo Stock exchange?

No. What we are going to do is that, in some cases, public Mozambican companies such as Empresa Moçambicana de Exploração Mineira orEmpresa Nacional de Hidrocarbonetos (ENH) are going to take the percentage. Then these companies are going to put their shares on the Mozambican stock exchange. They can then be bought by Mozambican companies and people.

When is the next gas licensing round?

It will be by the end of this year. However, discussions are ongoing, and we don’t know yet which blocks and how many.

Will there be a change in the size and length of the licences?

The length of the licences has not been discussed, but it is true that the blocks will be smaller. In this way, we can have more companies and they can work on the entire block more rapidly.

The 30-year licences have been criticised by companies for being too short to develop gas.

The limit of 30 years is a maximum, but after 30 years there will be a review with the company and an extension will be possible. However, the conditions will be different, as they will take into consideration the current situation, for instance the fiscal regime.

In the future, will the government try to influence companies’ decisions when they want to sell a stake or a block?

No, but it will reserve the right to give approval once they have reached an agreement, just as now.

Is the area of Palma, where the liquefied natural gas train will be built, going to enjoy a special status to smooth bureaucracy?

It will be a special economic zone managed by ENH Logistics, a subsidiary of ENH. We are studying how to speed up the bureaucracy in this special economic zone. ●

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