Heavy Sands on the Nampula Coast
A mine is a bargain struck once and lived with for decades. Mozambique has just struck one of those bargains again. The Irish company Kenmare Resources, which mines heavy mineral sands in the Moma and Larde districts of northern Nampula province, announced that Mozambique’s Council of Ministers has approved a 20-year extension of its agreement to process and export heavy sands, running until 2044.
In a statement to Mozambique’s stock exchange, Kenmare set out the main terms. Royalties based on gross revenue will rise in steps: from one percent to three percent between 2025 and 2029, to four percent between 2030 and 2034, and to five percent between 2035 and 2044. Certain services contracted abroad will be subject to a 20 percent withholding tax. Mozambique will have the right to buy up to 20 percent of annual production, at market prices, for local processing.
Across Southern Africa, governments are revisiting the terms under which their minerals leave the ground, seeking a larger share of revenue and more processing at home. The Kenmare extension is a small but concrete example of how that renegotiation looks in practice.
What Mozambique Gains
The royalty schedule is the headline. A move from one percent to five percent of gross revenue over two decades is a five-fold increase in the state’s direct take per unit sold. Because the royalty is calculated on gross revenue rather than profit, it is harder to reduce through accounting, which gives the treasury more predictable income.
The withholding tax on some foreign services addresses a common leak in mining economies, where payments to offshore contractors can drain value out of the host country. The option to buy a fifth of output at market prices for local processing opens a door, at least on paper, to building industries that add value in Mozambique rather than exporting raw sands.
Whether that door is used depends on whether Mozambique can attract investment in processing plants. A right to buy production is only valuable if there is someone ready to process it.
What Kenmare Commits
In return, the company commits to investing at least $200 million in equipment and infrastructure, plus a further $50 million in social projects, over the extension period. “The company commits to investing at least 200 million dollars in equipment and infrastructure, plus an additional 50 million dollars in social projects, during the extension period,” said Kenmare’s managing director, Tom Hickey.
Hickey played down the extra burden of the $200 million commitment and said the community spending is in line with Kenmare’s current practice. That framing suggests the company sees the new terms as manageable, which in turn raises the question of whether Mozambique could have secured more. Spread over two decades, $50 million for social projects is a modest annual sum for communities that live beside a large mining operation.
Steps Still to Come
The deal is not yet complete. The addendum still has to be signed and submitted to the Administrative Tribunal, the body that checks the legality of public expenditure. The processing and export agreement is also separate from Kenmare’s mining concession, which remains in force until August 2029.
Hickey insisted that the remaining steps are administrative, not a new round of talks. “This does not require any negotiation. It does not reopen negotiations,” he said. The agreement also allows for a further 20-year extension from 2044, although any such renewal would be subject to the law in force at the time.
The separation between the concession and the processing agreement matters. With the concession due to run out in 2029, Mozambique will face another negotiation within a few years, and the terms agreed now will shape its starting position.
Coastal Mining and Local Communities
Heavy mineral sands mining reshapes coastal land, and the operations in Moma and Larde sit on the Nampula coast. Long-term mining agreements of this kind carry questions about land use, resettlement and environmental rehabilitation that royalty rates alone do not answer.
Public scrutiny will be important here. The Administrative Tribunal’s review is a legal check on public spending. Still, communities and civil society will want to know how the $50 million social commitment will be allocated, who decides, and how progress will be reported.
Setting the Terms for the Next Twenty Years
Control over natural resources is exercised less in dramatic nationalizations than in the fine print of agreements like this one. Mozambique has raised its royalty share, taxed some offshore services and reserved a portion of output for local processing. Those are real gains, and they reflect a wider shift across the continent towards keeping more of the value of minerals at home.
The harder work lies ahead: turning the right to buy production into actual processing plants, making sure royalties reach Nampula’s communities and not only the national budget, and using the 2029 concession review to push for stronger terms. A 20-year agreement can lock in either a fair partnership or a missed opportunity. Which one Mozambique has signed will become clear only in how it is enforced.
