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“It is our goal and policy to make Mozambique win”

Interview - June 10, 2013
Mozambican Minister of Mineral Resources Esperança Bias speaks with Upper Reach about her country’s management of its mineral resources, the need for greater mining-related courses at universities and institutes, and the government’s aim to make the mining industry a win-win situation for investors, the communities and the government

What was your reaction, referring to the very globally significant mineral resources reserves recently discovered and how a long-term model of development was drawn, for improving the living conditions of Mozambican citizens?

In terms of identifying the natural reserves, Mozambique is in a good moment. These discoveries come in a moment when high growth of the economies in the Asian continent is taking place. The exploitation of these mineral resources is largely associated to this market, so they come in a moment where the industrial market of construction is growing, and these resources will provide the answers to these emerging markets. In the past, we were one of the major exporters of coal: we had, in the beginning of the 1980’s, 8 million tonnes of coal; today we estimated about 5 million tonnes with more ambitious numbers for the future.

The coal extraction growth comes from the macro-economic policies Mozambique is developing, from the reopening of exports, to more investments, from our peace environment and national security. All of these factors give the investor the confidence that his investment needs and the reassurance that his presence is welcome and he will have the projected revenues.

When we talk about the mineral resources, we also talk about the logistics – rail and ports infrastructure, for instance. Do you have a physical, educational, human and, most importantly, a legal structure, which meets the investors, the people and Government’s interests and needs?

We are working in a permanent base, in the adoption of a legal system that allows the rational and sustainable exploitation of the resources. We have the Mines and Oil Laws that were approved in 2001 and 2002. But after some time, while executing them and seeing the increasingly positive results they had on diverse areas of development, we felt the need to adjust those laws to our current reality.

We saw that the Oil Law did not include the LNG issues so, with the discoveries of gas in the Rovuma Bay, the legislation has to predict how this gas must be treated. There will always be concerns for fitting all the rising issues into a juridical framework; we want a legislation that benefits Mozambique, as it is the homeland of these resources, but we want the investor to win as well.

Then, the Mines and Oil Laws will be complemented by much other legislation and by the fiscal regime applied to those activities.

Can we say that there must be a balance in the fiscal regime because you want the foreign and domestic companies both to contribute by paying taxes and at the same time creating new sources of employment and integrating local communities?

It is our goal and policy to make Mozambique win, not just by the economic result that international companies generate, but also internally, by national companies being involved in the activities of mineral resources through direct exploitation, selling services, or through the partnership with foreign investors in the researching, production areas, or even, in using these resources. Because the extracting industry can create a value chain (before and after the exploitation), there is an interest for the Mozambicans being involved in the main chain.

In this context of resources exploitation and selling services, for example, in Kuwait and Saudi Arabia, educational institutes were created to meet the local needs of creating capacity and generating a strong domestic workforce. Does Mozambique share this strategy?

Yes, we do, and this is one of the main goals of the Government. We want Mozambique to have specifically trained people to respond to the demands of this industry (and, also to the outside world) – it is with pride that we say that in Kuwait we have some Mozambicans working. In the Eduardo Mondlane University, we are educating geologists (despite the low number, we are working in order to increase the quantity and improve the teaching quality).

We have the Medium Mines and Geology Institute in Moatize, the Polytechnic Superior Institute in Tete, and I believe the Catholic University is already lecturing on subjects related to mining activities. But we need more. In order to have enough qualified Mozambicans to respond to the demand in the medium term, we have some students in China, Malaysia, Brazil and Angola, alongside those that are studying in Mozambique.

Three years ago, the Government approved a specific educational strategy for this sector; we predict that 4,200 will graduate in the different specialties that will strengthen our local capacity. Part of this strategy is already being applied.

In terms of social responsibility, we could see in Songo, all the work the Cahora Bassa Hydropower Station (HCB) and Vale are doing in the area; these two companies have had a great impact in defining and achieving social responsibility. Is the same expected from companies such as Anadarko, ENI and other gas companies to come?

This is exactly what we want from these companies, that they have a big impact in the local communities and also at a national level. At the moment, we are discussing a corporate social responsibility policy, because in the terms of discussing the mega-projects, there is always this component. We want the investor (in the mineral resources sector) to know that, despite the processes of research, exploitation, etc of the mineral resources, he must invest in the fields of social responsibility as part of the overall investment.

The lines for the social responsibility are defined in a policy we hope to approve this year. It will guide and define the actions that must be taken. In the Rovuma Basin, although most projects are still in the researching phase, some actions have been already taken, that is the case of the water system that were restored in Mocímboa da Praia, in Palma and Mocumia.

Historically speaking, coal production has powered Britain to start the industrial revolution that shaped the world as we know it today. What does Mozambique expect for the future and what can the country learn from United Kingdom seen as a historical world power in terms of mineral resources?

We continue to solidify our relations of cooperation and friendship with the UK; it is translated in win-win situations for both countries as we already have British investors in Mozambique. We want more and more investors to come, not just for the upstream but also for the downstream. We want exactly to take the advantage of what the UK has to offer to the world, because the country based its initial growth in the development of mineral resources such as coal. Everything we can do, in order to collect experiences and learn from the UK, is always welcome – not only in the production area, but also in the educational area.