Heavy mineral sands producer Kenmare Resources is in discussions with the Government of Mozambique over “certain modifications” to the agreement to extend the mine’s operations into the Nataka mining zone.
Nataka contains about 70% of the 9-billion-ton mineral resource at Kenmare’s Moma mine and will keep the operation going for at least another 20 years or more. The estimated capital cost of the transition to the new mining zone is $341m.
Kenmare’s permit to operate the Moma mine should have been renewed before its expiry on December 21 last year but that has not happened.
That’s despite the company stating on October 27 that, “Kenmare believes that Government representatives share its objective of concluding the renewal process before the December 21 renewal date, without the need for recourse to the dispute resolution procedure provided for in the agreement.”
Kenmare stated in its report for the March quarter released on April 17 that, “the Ministry of Industry and Commerce provided confirmation that Kenmare’s existing rights and benefits remain in full force and effect pending conclusion of the extension process.”
Kenmare is now “discussing certain modifications to the applicable investment regime to obtain the agreement of the Government of Mozambique, notwithstanding Kenmare’s clear right to such an extension.”
The company said the proposal published on March 26 in the company’s 2024 preliminary results was not approved by the Mozambican Council of Ministers.
Kenmare stated it “continues to engage constructively with the Government while reserving the right to safeguard its contractual entitlements via all means, including international arbitration if agreement cannot be reached.”
