Maputo, March 10, 2026 (Lusa) - The mining company Kenmare Resourcers, which operates the Moma titanium mine in northern Mozambique, has said that the Mozambican Tax Authority (AT) is imposing new conditions unilaterally, reserving the right to resort to international arbitration.

Quoted in a statement sent to investors on Monday, Kenmare director Tom Hickey said that the Implementation Agreement (IA) for that operation, which expired in 2024 and has yet to be renewed, "is critical to Moma's long-term success" and complained that the AT is trying to accelerate the collection of royalties without a new IA in place.

"We are very concerned about the recent attempt by the AT of Mozambique to impose terms that were not mutually agreed with Kenmare. This action contrasts with the outcome of a meeting with several ministers (...), where it was agreed that we would work together to conclude negotiations by 20 March," adds Hickey, adding: "We are seeking urgent clarification from the Government."

In the information to investors, Tom Hickey explains that the proposal presented in April 2025 to the Government for the new Implementation Agreement "included several concessions," reflecting the "commitment to an equitable distribution of value from Moma and to substantial ongoing investment" in operations and local communities over 40 years.

"We would be disappointed to have to resort to arbitration to enforce our contractual rights. However, we may be forced to do so if we cannot reach a timely agreement," he says.

A year ago, Mozambican president Daniel Chapo, who had taken office three months earlier, said he would renegotiate contracts for megaprojects exploiting the country's resources, arguing that, 20 years on, Mozambique is no longer the same or thinks the same way.

In its information to investors, Kenmare explains that the Implementation Agreement "grants certain rights and concessions" to Kenmare Moma Processing (KMPL) over processing and export activities, and "clear rights to renew those rights and concessions on the same terms".

It adds that it requested the renewal of the Implementation Agreement in September 2022, and negotiations with the Government have been ongoing since then.

"To ensure a productive working relationship, when the original Implementation Agreement rights expired in December 2024, the Government provided written confirmation allowing Moma's operations to continue on historical terms while the parties continued negotiations," it recalls.

Kenmare claims to have proposed an increase in the royalty rate from 1% to 2.5%, the application of withholding tax on payments to non-Mozambican service providers from abroad, and additional investments and contributions to community projects during the 20-year extension period.

This proposal was revised in April 2025 to include a phased increase in the royalty rate from 2.5% in 2025 to 3.5% over those 20 years. However, according to the company, at a meeting of the Cabinet in July 2025, an "internal resolution" was adopted defining "terms for renewal" that "were not agreed upon" and "differ significantly from Kenmare's proposal," being "economically and operationally detrimental."

Kenmare states that it challenged this with the Government and it was agreed "that the terms would not be imposed while negotiations continued".

Although giving KMPL a 20-year extension, these terms include "an accelerated schedule for increasing the royalty rate from 2.5% to 3.5%", namely "increments of 0.5% until 2031", the "revocation of the Industrial Free Zone (ZFI) status, historically applicable to KMPL's operations" and the "limitation of customs duty and import VAT exemptions on certain capital equipment and related parts and accessories".

However, in January, "Mozambican customs officials were instructed by the tax authority to restrict VAT and customs duty exemptions applicable to KMPL imports," according to the “internal resolution”, "and in violation of the Implementation Agreement."

Kenamre questioned the Government, and it was decided to jointly resolve the outstanding issues to "agree on the final terms of the Implementation Agreement within 30 days", by 20 March.

"However, in early March, the tax authority requested that KMPL pay a royalty rate of 2.5%, in accordance with the internal resolution, instead of the 1% rate provided for in the Implementation Agreement. Although this rate is consistent with Kenmare's own proposal and is already being accounted for, KMPL has not paid it until the renewal process is formally completed," he complains.

PVJ/AYLS // AYLS

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