- Kenmare, Sasol and MOZAL among companies negotiating contract renewals
- President Chapo says new mega project contracts must bring greater benefits to Mozambicans
By José Calanga and Noémia Mendes
Maputo (MOZTIMES) – President Daniel Chapo stated recently, in Nampula Province, that negotiations are under way between the Government and major extractive companies for the renewal of contracts for the exploitation and export of natural resources.
Chapo specifically referred to the contracts held by Kenmare (heavy sands mining in Nampula), Sasol (natural gas exploration in Inhambane), and Mozal (aluminium smelting in Maputo). He declared that contracts signed more than two decades ago must now be renewed to ensure greater benefits for Mozambicans.
Commenting on this development, Rui Mate, a researcher at the Centre for Public Integrity (CIP) and an expert on the extractive industry, said the most important step was the Government's acknowledgement that the current mega project contracts contain clauses that are detrimental to Mozambique.
Mate called for greater transparency in the negotiation of contract renewals. Mate is one of the most respected researchers on the extractive sector in Mozambique. His work includes compiling the Annual Transparency Index for the Extractive Sector in Mozambique, which assesses the transparency levels of companies in the industry and is based on the voluntary participation of nearly all major extractive companies operating in the country.
Speaking to MOZTIMES about the negotiations announced by President Chapo, Mate expressed concern that they are being conducted in secrecy, with little public information available.
"We need to start looking at which clauses failed to create benefits, and which ones created problems for us," said Mate, adding that "this learning process will allow us to do better in the future."
Mate suggested that the new contracts should improve on several aspects. "First, there is the issue of local content," he said, arguing that multinational companies should be required to use local products and labour.
"Second, a major opportunity to increase benefits is to ensure that contracts guarantee full processing of resources within Mozambique," he said, explaining that this "would create more companies and, consequently, more jobs in Mozambique."
Mate also pointed out that many resource-hosting communities have not benefitted from the development that was expected with the arrival of mega projects. "There was a belief that the extractive industry would bring development. But in some cases, it has led to impoverishment," he stressed.
When Daniel Chapo was still Governor of Inhambane Province, he made headlines for criticising the South African petrochemical company Sasol, which, in his view, did very little for communities surrounding the natural gas project. At the time, Chapo accused Sasol of making minimal efforts in terms of social responsibility.
Although social responsibility is not a mandatory part of extractive industry projects – as it depends on the goodwill of companies to make community donations – it is hoped that the concern Chapo demonstrated as Governor will now translate into firm commitments during the negotiation of new mega project contracts. (JC/NM)
