Mozambique’s new mining law, which mandates a minimum 15% free-carried state stake in all mining projects, could deter foreign investment and undermine the country’s attractiveness as a mining destination, the Vice President of the Chamber of Mines of Mozambique has warned.
By Rudairo Mapuranga
Speaking at the Chamber of Mines of Zimbabwe Annual Conference Lithium Symposium, Geert Klok, Vice President of the Câmara de Minas de Moçambique (CMM), delivered a candid assessment of his country’s evolving mining landscape, drawing important lessons for regional peers, including Zimbabwe.
Klok noted that large-scale mining in Mozambique is a relatively new phenomenon, emerging only in the past two decades. The country’s mineral portfolio includes thermal and coking coal in Tete Province, adjacent to Zimbabwe, natural graphite in the north, heavy mineral sands along the coast, and gemstones — principally rubies. Many of these minerals are recognised as critical in most jurisdictions, and Mozambique’s new mining law designates them as “strategic minerals”, though the final list has yet to be defined.
The mining law, passed by Parliament in May 2026 and signed into law by President Daniel Chapo on 3 June 2026, replaces the 2014 mining regime and introduces sweeping changes.
Klok expressed strong concern about the mandatory state participation clause.
“We will have, unfortunately, in our opinion as the Chamber of Mines, a minimum of 15% free carry of the state in mining companies, which we fear will not make Mozambique any more attractive as an investment destination for foreign capital,” he said.
The law requires the state, acting through a newly created national mining company, Empresa Nacional de Minas (ENM), to hold a minimum 15% free-carried, non-dilutable participation in all mining projects at any stage of the value chain. This means the state is not required to contribute capital, yet its ownership interest remains unchanged regardless of future capital injections.
Klok warned that the provision could increase costs and heighten perceived risk for investors, particularly at a time when the sector remains dependent on substantial exploration and development investment. The Chamber has also raised concerns about the absence of clear compensation mechanisms for investors in situations involving operational suspension due to force majeure.
Klok acknowledged that mandatory in-country beneficiation, another pillar of the new law, aligns with a continental trend. The law prohibits the export of unprocessed or semi-processed mineral products, except with ministerial approval tied to plans for local processing.
“This is a trend in the region, a trend in Africa, to do more of the value addition in-country, and rightly so. It’s a proper strategic objective to move up the value chain and industrialise,” Klok said.
He noted that other countries have paved the way, citing Zimbabwe, Namibia, and the Democratic Republic of the Congo. However, he cautioned that success depends on creating the right conditions: reliable infrastructure, affordable electricity, a conducive business climate, security, and proximity to customers.
Drawing parallels between graphite and lithium, Klok used Mozambique’s graphite sector to illustrate the complexities of beneficiation.
China currently produces about 78% of the world’s natural graphite and is also the largest producer of synthetic graphite and the biggest consumer. Mozambique was the world’s third-largest graphite producer two years ago but has since dropped to fifth place, partly due to reduced production resulting from lower demand and prices, as well as civil unrest in 2024 and 2025. Mines in Brazil and Tanzania have moved up the rankings.
Mozambique’s graphite production fell from a record 165,900 tonnes in 2022 to 97,300 tonnes in 2023 and declined a further 64% in 2024 to 34,900 tonnes due to operational suspensions. The country closed 2025 with production of 67,078 tonnes, though no output was recorded in the first quarter due to the five-month closure of the main Balama facility following post-election protests. However, production surged in the first quarter of 2026 to 28,018 tonnes, double the amount initially forecast for the entire year.
Klok highlighted how geopolitics is reshaping graphite supply chains. China introduced export controls on graphite in late 2023, while the United States imposed high import duties on Chinese graphite. As a result, Chinese battery manufacturers have established operations in Indonesia, diverting some of the graphite previously exported from Mozambique.
At the same time, the US is actively encouraging alternative supply chains linked to its EV market, particularly Tesla. The Balama graphite mine, one of the world’s largest graphite deposits, owned by Australian company Syrah Resources, has received US$150 million in loans from the US government. The Australian parent company has built an anode precursor material plant in the US, benefiting from Inflation Reduction Act subsidies.
Klok concluded with a call for regional collaboration.
“Very few of our countries will have the entire supply chain within their borders. If we’re talking about battery minerals and electric vehicles, our countries are simply too small to support industries that need this scale. So, at some point in the supply chain, we will be exporting,” he said.
He pointed to SADC’s market of approximately 380 million people and South Africa’s established automotive industry as foundations for regional integration.
“We’ve got probably around 10 critical minerals in various countries that we can supply into that supply chain and work together to make the supply chain a success.”
His message was clear: local supply chains are desirable, but they must be competitive, and the region must work together to achieve that competitiveness.
