Mozambique finds itself embroiled in an international arbitration battle concerning a mining license dispute. Two unnamed natural resource companies have filed a claim against the government at the International Centre for Settlement of Investment Disputes (ICSID), an arbitration institution affiliated with the World Bank.
The crux of the dispute revolves around a mining license allegedly revoked without proper legal channels. “The claimants allege that their license was transferred illegally and without their consent, to an entity unrelated to them, but controlled by their then Mozambican partners,” a source familiar with the matter revealed. This alleged act of dispossession further escalated when the license was transferred yet again, this time to a Chinese state-owned enterprise, TZM Resources, in December 2020.
The aggrieved companies are no strangers to legal recourse. In 2012, they secured a favourable verdict in the High Court of England & Wales. However, their attempts to enforce this judgment in Mozambique’s Supreme Court proved unsuccessful. This latest move to ICSID signifies their determination to seek compensation for what they perceive as a wrongful seizure of their investment.
The ramifications of this case extend beyond the immediate dispute. “The outcome of this arbitration will be closely watched by international investors,” commented an industry analyst, who spoke on condition of anonymity. “A ruling against Mozambique could potentially deter future foreign investment in the country’s mining sector, particularly for those wary of potential legal roadblocks.”
The Mozambican government is yet to publicly comment on the specifics of the case. However, a government spokesperson did reiterate Mozambique’s commitment to upholding the rule of law and resolving disputes through established legal channels.
The arbitration process is expected to be lengthy and complex. The final verdict from the ICSID tribunal could have significant financial implications for Mozambique, potentially running into millions of dollars. More importantly, it could cast a shadow on the country’s attractiveness as an investment destination, especially within the resources sector.
