President Daniel Chapo has signalled a significant shift in Mozambique’s approach to foreign investment, asserting that the nation is no longer bound by agreements struck two decades ago. He has called for the renegotiation of contracts for major resource extraction projects, arguing that the country’s evolving needs and aspirations demand a fresh look at existing deals.
Speaking after a provincial visit, Chapo emphasized that “Mozambique is no longer the same as it was 20 years ago. We’re not the same people, we don’t think the same way, we don’t have the same goals.” This declaration comes at a pivotal moment, as the concession for the Moma titanium and zircon mine, operated by Australian firm Kenmare Resources, expired in December.
While Kenmare continues operations, negotiations for a contract renewal have stalled, prompting Chapo to clarify that this is not a delay but a deliberate process. “There are contracts in Mozambique that were signed 20 years ago. I’ll give just three examples. I could give several. I’ll give the example of Mosal [steel], and I’ll give the example of Sazol [hydrocarbons]. In Inhambane, I’ll give the example of Kenmare, here in Nampula province. And these contracts, after 20 years, we now need to renew,” he stated.
The President acknowledged the delicate balancing act involved in these negotiations. “Kenmare is trying to defend its interests and we, as Mozambique’s government, are trying to defend the interests of the Mozambican people.” He highlighted public concerns regarding corporate social responsibility and local content inclusion as key factors driving the renegotiation.
Chapo stressed that the government’s pursuit of “national interest” is synonymous with the “interest of the people.” He assured that the negotiations with Kenmare are proceeding peacefully, with no disruption to operations. “They don’t stop operating because we think it’s a completely peaceful negotiation,” he explained.
The renegotiation comes at a time when Kenmare’s profits have seen a significant decline. Reports indicate a 50% drop in profits for 2024, down to $64.9 million. This financial backdrop adds another layer of complexity to the ongoing discussions.
President Chapo’s assertive stance signals a new era in Mozambique’s resource management, where the government seeks to ensure that the nation’s wealth benefits its citizens more equitably. The outcomes of these negotiations will likely set a precedent for future foreign investment in the country.
