• estaciosvaloi

Mining in Cabo Delgado

Foto: Estacio Valoi

It’s about 15 minerals, spread through several districts in reddish, dark, brown, black soils, along the waters of Cabo Delgado, which range from Gas, to oil, rubies, gold, graphite, garnet and others. A richly poor province, where the minerals in little or nothing benefit, not only the local communities, but the Mineral Resources and Energy Provincial Direction.

From yesterday’s conflicts – where the local communities as well as foreigners, that is “illegal miners”, that were most of the time brutally violated by the mining companies’ protecting security forces, with people being shot and spanked, no compliance with the social responsibilities, poverty exacerbated, violation of the fundamental rights in general – after about 4 years, Moz24 Horas went to measure the current pulsation of the situation.

At the top of the mountain, on the limit of Montepuez District, with our eyes sitting on the horizon, a vast landscape can be envisioned. At the bottom, heading towards Montepuez, is the Montepuez Rubi mining concession – a joint venture of 75% held by the English Gemfields and the rest by its Mozambican counterpart MWriti, Lda – totalling 33.000 hectares. Still from the same angle, more to the right, is FURA (MUSTANG, SRL), Regius. Through Montepuez gold deposits up to Balama’s graphite. Looking in the opposite direction, eyeing now Ancuabe District, on the left we have Muaja’s gold mine, which extends all the way to Macomia, and on the right Nakata’s garnet mine.

About this scenarion, again for over an hour and a half, the dialogue was with Fernando Jange, chief-inspector from the Mineral Resources and Energy Provincial Direction.

EV: You have Montepuez Rubi Mining, Mustang and Regius, and there seems to be another one, Fura. How many more companies is there in the area mining for rubies?

FJ – In truth, in our province, if my memory doesn’t betray me, there were at the time more than 6 or 7 licenses for Ruby Mining, and in this case it was SRL as the mother company that had more companies. But as you know, the mining sector needs investment and it didn’t succeed by itself. And that is why it joined FURA and MUSTANG. At this stage we know that they are in the process of changing from a single to a collective of those 3 companies.

Regius is a subcontracted company to carry out the survey works, but I don’t have any information if it will be part of the collective, but we know it is contracted as an operator.

EV: In that case we have 3 companies collectively with FURA?

FJ – Exactly.

Valoi: What changed?

FJ – When President Nyusi was here, in the context of this decentralization... in fact we have a new mining law and its respective regulation. There is also in force the revision of the Mining National Institute’s constitution, which includes all the acting areas. The new mining law gives priority, or it says that the resources must first benefit the nationals. Of course, but we can’t stop investment, but the priority is for the nationals of course, not to mention future generations.

When we say nationals, we start at the community where most of the resources are. So when a project is implemented in a community, the first one to be considered is the community. The community must feel it owns part of the project because if the company operates there without a mutual coexistence with the community, it can fail.

EV: Some years ago I visited those communities you are referring to and noted that in terms of benefits there were none. What changed in concrete terms?

FJ – Yes, because at that time, in fact there was no social responsibility policies. But now, besides the social responsibility policy for the companies. Besides the 2.75%, they also have the social responsibility, which means that at this stage the population is in advantage.

EV: At this stage, under the new law and the 2.75%, considering the rubies, graphite, etc., how many companies exist in Cabo Delgado?

FJ – The law says that, as soon as a company is implemented, it must pay taxes in the form of 2 + 1, which means that only on the 3rd year after implementation they have the right to contribute with the 2.75%. At this stage in the povince, the only company paying the 2.75% is Montepuez Rubi Mining. Balama’s and Ancuabe’s Graphite haven’t started yet channelling this tax.

EV: But these companies have been working, mining and exporting, as far as I know for about 3 years. Is that right?

FJ – Yes. In this case, actually as a coincidence, Balama and Ancuabe’s companies inaugurated in the same year. So they say that next year, 2021, the population of these 2 districts will start benefitting from the 2.75%. As I said, it is 2 + 1.

EV: Back to the mining legislation, first it social responsibility and then mining. What is there comparatively between Balama and Montepuez Rubi Mining?

FJ – There is a slight difference. Because Montepuez Rubi Mining was the first company in reality to be implemented, when we look at the social responsibility in Montepuez or Namahumbir, there are more infrastructures related to social responsibility, while Balama is still progressing. At this stage, the company has been assisting in agriculture, health, and has also an orphanage. They are assisting, but at this stage it is not what everybody wishes, they want more.

EV: I remember that before the fusion between FURA and MUSTANG, there was in a way or another already exports, even with a participation in auctions? Isn’t that right?

FJ – In fact, the mining law predicts that any company with a license still in the phase of prospection and survey of precious minerals, if it collects the minerals, the law allows the sale, as long as it is subjected to taxes, and that is what MUSTANG did. They analysed, collected minerals – in this case rubies – and went to do an auction in Mauritius, but unfortunately it didn’t go well. I think that the person in charge of the auction didn’t select properly, gathering scrap minerals. So they only got at the time, if I remember well, about 600 or 700 thousand dollars.

EVa: Looking at those companies under the social responsibility component, it is something that is done à priori before the mining/production phase, that according to the mining law. But we don’t see that. Why?

FJ – During the prospection and survey stage the companies only spend, they don’t have accumulated money. But in some moments, maybe because they are sensitive, they have been giving some support to the community. But what is expected is that, because the company is investing, it doesn’t have the means to support, only after it starts producing and having profits. No company can be conceded a mining concession without the social responsibility project.

EV: Benefits to the communities, local associations in permanent conflict with the companies for lack of dialogue. Based on what the Republic President Filipe Jacinto Nyusi said, “First benefit the communities,” the mentioned local associations are not producing and don’t have benefits. Why is that?

FJ – Well, as I was saying, the mining occurs in the community. But what happens is that, just like it is in our case here in the province, the companies have the license. I think that when they acquire the license, they have some time to be there in the field and, at that time, the populations discovers it and starts extracting. We, as provincial direction, have been advising the companies that the best way to start is to look after the community.

It is true that the law doesn’t allow, but there are two possibilities: you either accommodate and absorb everybody to work with you; or you find a way to do the studies while allowing the community to extract in a certain portion. A concrete example of this is Mahera here in Ancuabe. In an area was LPP, but the association organized itself – a freedom fighters association – that did a joint venture with another company. It is not easy, but we try to minimize the situation.

EV: I mention this because it has been more than 4 years where the gold, from Muaja to Macomia and Montepuez already existed. Some communities created associations, legalized, and were mining there already. But all of a sudden the areas were taken away from them. Currently, I believe, there is now a Chinese company there.

FJ – In fact there are 2 garnet areas. What happens is the following: the legalization of the mining activity involves two aspects; first, the district must recognize the people from there, the community; then it goes on to the provincial direction, which didn’t happen, for example, in the Muaja case. The population went to request at the district level, which automatically recognized the association. But the activity was not, and they went to mine. The association itself invited a Chinese citizen there. But it has nothing to do with Chinese, it is all Mozambican. When we realized what was happening, we communicated, notified the company. It is the area where Socopeça company works and at this stage the company is now working with the community.

EV: Is Socopeça Mozambican?

FJ – 100% Mozambican. Ancuabe, in the hard area you were mentioning, is in fact one of the problems we have, because most of the mining is being done in the Quirimbas National Park and we, Mineral Resources Authority, cannot issue a license. What we did was to report the case to the ministry, in this case INAM, which is competent. INAM in turn submitted the process to ANAC, which does not allow that the area ne licensed. In fact we recognize that gold mining is still happening and that people are working there.

EV: There was a lot of mining licenses issued to single people and some companies and others without licenses that were already mining. Some after out publication, like MUSTANG that went to get a license at your department. What is the current situation?

FJ – For example, in Cabo Delgado all have licenses. The problem has to do with the beginning of their activities. The law predicts revocation, and we as provincial direction check the licenses and, for the ones that are not working, we submit the license to INAM for revocation.

EV: A flux of licenses and then there is no activity. How many were revoked here?

FJ – I cannot tell you precisely how many, but in our map there is a small opening. Years back there was no space. For example here, in Metuge and further there is empty space.

EV: For Cabo Delgado and for your institution, to what extent are these projects beneficial?

FJ – In truth the projects are welcome, not only for the provincial direction, but also to increase our income. For our direction in particular, and as you know the resources are scarce and finite, its management has to be transparent, what is being produced. We would in fact wish that the little that people get, could cover the provinces in the sense of impress more dynamics for us to inspect. We don’t have transport, but I think that with this new decentralized government modality it will get better.

If I remember well, in 2014 we received an Isuzu vehicle and 4 motorbikes. 2 are here in Pemba and the other 2 in Montepuez, but that doens’t cover the Provinces extension. Only these means! They are not enough.

EV: Going back to the associations. Community prospectors expelled or removed from the mining areas. In one area there was even a cleaning operation. What mechanism is there to guarantee that those people can mine, have a market where to sell their rubies?

FJ – As for the sales and markets, I think that at the end of last year the government designated an executive director for the commercial posts and, in our case, in an initial phase it will be in Nacala. At that time we had a deficit. Besides the associations, there are those people that have a license to buy and sell minerals and at that time they didn’t have where to sell. They will now have the conveniences with the creation of this commercial post, even the so called community prospectors.

Expelled is not quite the case. The truth is that, when someone is awarded a license, in principle it must guarantee the control of its area. It is predicted in the law. If they cannot control it, the State can take the license away, the area. As for the neighbouring people, which used to “survive” with gold mining, we told the companies to not be in conflict with them.

EV: Mineral smuggling from Pemba airport, Nacala harbour, Mozambican borders, which is very perforated, and some people from the miners involved. What is the way out?

FJ – In fact the control of minerals is very complex, expecially because it is easy to transport a stone, put it on a pocket. Fortunately in our case it has been positive, working in conjunction with PRM, Customs and Migration. For example, in the province we have a system where, before any mining company exports its minerals, a team from customs and mineral resources departments go and evaluate and close the containers with rubies. But it is difficult to control.

Now our main problem is the illegals, because those sometimes don’t use the road. That is the major problem, because there we don’t coordinate with the police. So we expect to install a control this year in the limit with Nampula, Niassa. Unfortunately we border with Tanzania, where most of the minerals go. They go out via Tanzania. But the border problem is in fact not under out mineral resources department, but it is the responsibility of all Mozambicans to unite efforts and denounce.

EV: What is the situation with tax evasion?

FJ – It is very damaging. If they don’t pay taxes, we lose. No schools, hospitals, roads, many things.

Valoi: When the rubies are extracted, sold in Mozambique... as soon as the product reaches the international commercial chain, to the shop, the price is 15x more, compared to the buying price, extraction in Mozambique. Isn’t that a loss?

FJ – The State is aware of that, even the ministry itself. There has been dialogue with the companies for the processing of all the minerals to be done here. The ideal would be to process them here, sell the mineral already processed. We would then earn more. We are in fact aware that we are losing.

EV: What is missing so that the conditions can be created for the processing to be done in Mozambique, that considering that a lot of rubies are exported, already with some taxes being paid?

FJ – The processing involves funds and at this stage the State cannot create companies. What we have been doing is talk with the companies requesting them to invest here. According to the law, any licensed company that wishes to import the necessary machinery that doesn’t exist in Mozambique just needs to annex the written request and the Ministry of Commerce and Finances will exempt them. So we are encouraging them to attract more investments.

EV: The conflicts with the community prospectors continue. What is the scenery after the clean-up?

FJ – After the clean-up I think we will be benefitting. If we compare the auctions made at that time, where there was a lot of prospectors, and after the so called clean-up, we can say there has been an increase. And the idea is to maintain, have control of the minerals, which is very important.

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