The Government of Mozambique has extended the agreement for Kenmare's operations at the Moma titanium mine. According to the company itself, the reciprocal conditions include royalties of up to 5%, investments amounting to 185 million euros, and local processing.
The Irish mining company Kenmare Resources informed the market that the Council of Ministers approved the extension of rights and concessions covered by the Moma heavy sand mine Implementation Agreement (AI), located in Nampula province, northern Mozambique. This decision includes changes to the tax, commercial, and investment regimes applicable to the subsidiary Kenmare Moma Processing (Mauritius) Limited (KMPL).
Kenmare Resources specified that approval was obtained on October 13, and the official notification was received on October 29. The company has been operating the Moma mine since 2007, and its production accounts for about 6% of the global supply of titanium raw materials, which are supplied to clients in more than 15 countries for use in the production of paints, plastics, and ceramic coatings.
The new agreement regulates KMPL's mineral processing and export activities, while the mining operation itself remains under a separate legal framework. The initial 20-year authorization was set to expire in December 2024, and the company has been negotiating an extension for another two decades since then, continuing to operate under the previous terms during the transition period.
The company's CEO, Tom Hickey, stated that Kenmare is satisfied with the approval of the extension of its rights and concessions under the Moma AI. He noted that the company possesses mineral resources to support production 'for more than 100 years' and justified the agreed changes by the need to achieve 'a proper balance between Kenmare's interests and a greater contribution to Mozambique.'
Among the changes is a gradual increase in royalties from the company's gross revenue. Currently, it stands at 1%, but will rise to 3% from 2025 to 2029, to 4% from 2030 to 2034, and to 5% from 2035 to 2044. The introduction of a 20% withholding tax on services provided by KMPL from abroad is also planned, which will come into effect after signing a supplementary agreement formalizing the extension and related terms.
The company commits to investing no less than $200 million (185 million euros) in industrial facilities, equipment, and infrastructure over the next 20 years. Furthermore, it retains the right to request a new 20-year extension in 2044, according to current legislation. KMPL is also obligated to finance and implement social projects and corporate responsibility totaling $50 million (46.3 million euros), aimed at education, healthcare, transport, communication routes, energy, water supply, sanitation, and small and medium enterprise development.
Another provision allows the Mozambican state to acquire up to 20% of KMPL's annual output directly or through third parties for local processing 'at market prices,' subject to prior notification two years or another period agreed upon by the parties. According to Hickey, 'the extension gives Kenmare the necessary confidence to continue investing in Moma' and 'support host communities while continuing to generate income for all stakeholders.' During this process, the company acknowledged the possibility of resorting to international arbitration if agreement on the new terms could not be reached, although it always preferred resolution through negotiations.
Kenmare reported that it is currently working with the Government of Mozambique on signing a supplementary agreement, which will subsequently be submitted to the Administrative Court within the necessary legal procedures to finalize the process.
