By MOZTIMES
MAPUTO (MOZTIMES) – The Mozambican government said on Tuesday that negotiations with the Irish mining company Kenmare Resources over the future of the Moma heavy mineral sands operation in the northern province of Nampula are continuing in good faith, stressing that the mine remains operational despite the expiry of its initial mining concession.
Government spokesperson Inocêncio Impissa said both Mozambique and Kenmare retain the right to refer the dispute to international arbitration if negotiations fail, but insisted that neither side has taken that step and that discussions remain the preferred path.
“It is not a threat. It is Kenmare's prerogative,” Impissa told reporters after the weekly Cabinet meeting, referring to the company's right to seek international arbitration.
“But I should also say that the right to resort to international arbitration also belongs to Mozambique. Mozambique can do the same. There is no problem” Impissa said.
His remarks come amid ongoing negotiations over revised fiscal and contractual terms governing the Moma titanium minerals project in Nampula province, one of the world's largest producers of titanium feedstocks.
Impissa said the government had not yet initiated arbitration because it was still awaiting Kenmare's definitive position.
“Suppose Kenmare says, 'No, I will not do that,' or 'I do not intend to do so,' and gives a definitive response. There is nothing preventing the Mozambican government from going to an international arbitration tribunal to demand exactly what it considers appropriate,” he said.
Despite the disagreement, Impissa stressed that operations at the mine continue uninterrupted while negotiations proceed.
“Today Kenmare continues to operate normally, even though the period of the first concession has ended, because we believe in good faith and in Kenmare's willingness to continue working while discussions take place,” he said.
He argued that suspending operations would have harmed both parties.
“The normal approach would have been to stop operations and then try to negotiate. In that case, we would all lose,” he said.
According to Impissa, the government's priority is to ensure that Mozambique derives greater value from its natural resources while maintaining an attractive investment climate.
“Our obligation, like any government, is to protect the country's assets, protect the assets of its people, enhance the value of their resources and allow business to take place, but ensuring that good faith prevails”, he said.
He added that the government's assessment is that Mozambique “can obtain greater benefits from the exploitation of the natural resource” at Moma, adding that this is the main reason behind its current negotiating position.
Impissa dismissed suggestions that relations between the government and Kenmare had broken down, describing arbitration as a normal legal mechanism available under international investment agreements.
“When parties fail to reach an understanding through dialogue, they may resort to other institutions. That is entirely normal,” he said.
Kenmare Resources operates the Moma Titanium Minerals Mine, one of Mozambique's largest mining investments and a major exporter of titanium minerals, including ilmenite, rutile and zircon. The ongoing negotiations are being closely watched by investors as a test of Mozambique's approach to balancing investor confidence with efforts to increase returns from the country's natural resources. (MT)
