Mineral Resources Management Capacity Building Project

  MINERAL RESOURCES MANAGEMENT CAPACITY BUILDING PROJECT

2001 - 2007  

Project Overview

Mozambique is rich in minerals and has a favorable geological environment for the development of mining activities. However, data available at the project start indicated that the impact of mining on the economy represented only 0.25 percent of the Gross Domestic Product (GDP) and about 1.4 percent of exports. Furthermore, the Ministry of Mineral Resources (MIREM) had estimated that about $10 million worth of gold and $30-40 million worth of semi-precious stones were illegally exported from Mozambique each year. Annual fiscal revenues arising directly from mining represented only about $1 million a year.

The mineral resources management capacity building project had a strong focus on the improvement of the institutional capacities in the mining sector through technical assistance to the Government of Mozambique for: (a) institutional development and regulatory reforms to encourage the expansion of private investment in mining; and (b) targeted interventions to alleviate poverty in areas of strong incidence of small-scale and artisan mining.

Project Financing 

Project Results

This project was implemented from 2001 to 2007. The following are the main results achieved in each of the four main components of the project:

1.       Institutional Reform and capacity Building of Public Mining Institutions

This component helped improve Mozambique’s capacity to process new licenses using a new mining cadastre. At the project start, there was an inefficient mining cadastre with major delays in processing new titles. Today, the cadastre operates efficiently since its establishment in 2003 (central bureau established in Maputo and linked to four regional bureaus in Manica, Nampula, Tete, and Zambezi. As a result, 315 licenses were processed in 2001, 305 in 2002, 590 in 2003, 785 in 2004, 978 in 2005, and 866 in 2006.

This component also supported the development of the new mining code, and its regulations are now fully enacted. At the project start, the mining law and regulations were outdated. Today, the country has adopted legislation that is in line with international best practices, which contributes to a modern and enabling environment for mineral development. Examples of reviewed and new regulations include the following: 

o        Approval of a new mining law (nr.14/2002), 06/26/2002

o        Approval of environmental regulations applicable for mining activities (Decree nr. 26/2004)

o        Approval of regulation for trading of mining products (Decree nr. 16/2005), 06/24/2005

o        Adoption of a new statute for the mining development fund (Decree nr. 17/2005), 06/24/2005

o        Approval of a regulation for technical safety and health for geological and mining activities (Decree nr. 61/2006)

o        Approval of basic norms of environmental management for artisanal mining activities (Ministerial Diploma nr.189/2006)

o        Approval of the new tax law for mining activities (nr.12/2007)

o        Approval of the law for fiscal incentives regime for the mining and petroleum areas (law nr.13/2007)

o        Approval of a draft mining fiscal regulations, for adoption in 2008

2.    Development of the Country's Geological Infrastructure

This component helped develop better information on the country’s mineral resources, to clarify what type and where minerals occur in the country, making it easier to attract private investors. To this end, the project carried out a number of geophysical airborne surveys and produced and published geological maps. Mining information systems to store this data were also developed.

At the project start, the country had outdated and limited geological information and geological maps. Through this component, a geophysics regional airborne survey was conducted covering 192,441 line kilometers (about 168,189 km2). Another high density airborne survey covering 521,837 line km (about 136,218 km2) was also carried out and completed.  The project also developed a geological mapping of Mozambique with several maps produced.  All data was delivered to the National Directorate of Geology (DNG) in digital format and is available at its documentation center— today there has been strong demand by mining investors for the data.

The project also helped refurbish and modernize the DNG’s documentation centre, and established a minerals information system. An industrial minerals survey was also successfully carried out under this component, as well as the rehabilitation of the National Museum of Geology. Finally, through this component, the project also reinforced the DNG’s central laboratory.

3.    Establishment of an Environment Management System

This component helped establish an efficient system to process environmental applications, linking the environmental permitting process to the mineral license application process so that the two can be tracked. At the project start, there was lack of capacity to process environmental applications efficiently and this link did not exist, which made it difficult to hold those with mineral licenses accountable to fulfill environmental requirements at the various stages of mine development. As a result, some of the progress include the following:

o        It takes now from 5 to 35 days to process a request for environmental applications for exploration and mining permits. Furthermore, an environmental and social auditing diagnostic was undertaken with project support and, in follow-up to it (and other studies undertaken with project support), an environment monitoring unit was established under the Ministry’s National Directorate of Mines (DNM).

o        An Environmental Management Information System (EMIS) was created and integrated into the mining licensing cadastre; and regular coordination between the ministry responsible for mining (MIREM) and the ministry responsible for environment (MICOA) were instituted.

4.    Sustainability of Artisanal and Small-Scale Mining

Over the course of the project, the focus narrowed in on establishing pilot artisanal and small-scale mining sites—in clay and gold—to demonstrate what can be achieved to improve techniques and lives of artisanal and small-scale miners. These included:

o        12 sites as ceramic pilots in four provinces equipped with kilns, and 50 people (including 20 women) trained in their use; over 900 people (60 percent women) are benefiting from the use of the kilns.

o        6 sites/associations as gold pilots in three provinces equipped and 90 people trained (including at least 10 women).

Project Impact  

This project helped develop a formal mining sector, positively impacting state revenues from the mining sector. More specifically:

o        At the project completion, there were 22 private operators in Mozambique, versus 10 in 1996. Over the project period, the MOMA sands ilmenite deposit development was commissioned in 2006.   The project also provided direct support to the Government in regard to the Moatize coal concession and subsequent approval of a $2 billion mine development plan—these developments have a potential to generate significant revenues for the State.

o        Over 2002-2006 period the annual average investments in the mining sector increased from about $10 million to $90 million.

o        There was an increase in average annual minerals exports.  Mineral exports were approximately $5.1 million at the project start. They rose to $6.1 million in average annual mineral exports from 2002-2006, and are expected to rise to over $1 billion once Moatize coal concession in Tete province is commissioned.  

The new legislation and regulations, as well as the establishment of the mineral information system, has helped improve oversight and management of the sector.

The refurbishing of the mining documentation center as well as the National Museum of Geology is helping improve general knowledge of the sector for all interested. 

The project has also provided opportunities to small-scale miners, of which an important number of women.