February 24, 2012 / 3:01 PM / in 6 years

Mozambique suspends Tete coal licence issuances

MAPUTO, Feb 24 (Reuters) - Mozambique will not issue any more new coal prospecting licences for its Tete province, where the likes of Rio Tinto and Vale have started a global rush in search for coking coal, the national mining inspector said on Friday.

The former Portuguese colony has seen a flood of foreign investment on the back of a boom in its coal mining sector, with Tete estimated to hold one of the world’s largest reserves of coking coal, used in the production of steel.

Those not already active in the country have been setting up offices in the southern African country, hoping to get a foothold there via future licensing rounds.

“Tete is now overloaded with coal projects. We now want to concentrate on the existing licences and projects,” Afonso Mabica told Reuters.

“If we find companies which are not complying or giving up, we will take their licences back. Eventually, we can decide to issue new licences.”

The decision will not affect those who already hold a prospecting licence and who will eventually need to get a mining permit as their projects advance.

Official figures show some 112 coal licences had been issued to 45 national and international companies for the Tete province. So far only Vale has begun exporting coal.

Earlier on Friday the minister for mineral resources said that a new mining law, which will go for approval in April, will not propose any changes to the current tax regime and any changes will be small and seek to streamline and simplify procedures rather than erect additional hurdles for investors.

“The new mining law will not tamper with taxation. There is no need because we charge the same tax that is charged in the region, in the specific case of coal it is 3 percent of revenues, ” Esperanca Bias told a news conference.

She said it would be unfair to change the taxes when apart from Vale the mining firms had yet to get any returns on their investment in the country.

The government instead will focus on getting the maximum benefits for its communities by obliging companies to invest in schools and other infrastructure.

She said the government was preparing a national policy to regulate social investment and the policy will address the issue of resettlement of communities when new mines are being built.

In January, families resettled by Vale launched a protest against the Brazilian miner, saying the firm had failed to provide them with access to water, electricity and agricultural land at their new resettlement area as promised.

Vale did not comment on the allegations at the time. (Reporting by William Mapote, writing by Agnieszka Flak, editing by Ed Stoddard and Keiron Henderson)

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