7 March 2014

Mozambique: Mining Companies Failing to Fund Communities

Maputo — Most of the mining companies operating in the western Mozambican province of Tete are not honouring their legal obligation to channel part of their revenues to the development of the local communities.

Speaking at a press conference on Thursday, during a meeting of the Coordinating Council of the Ministry of Planning and Development, the Tete provincial director of planning and finance, Maria de Lurdes Fonseca, said the mining companies should have paid 22.2 million meticais (about 719,000 US dollars) in 2013,

But in reality only 7.2 million meticais was paid to the communities, and that came from just one company, Vale of Brazil.

According to Prime Minister Alberto Vaquina, speaking in the Mozambican parliament, the Assembly of the Republic, the state budget, for both 2013 and 2014, stipulates that 2.75 per cent of the revenues generated by mining companies should be used for community development in the areas where the mines are located. This is covered by laws on mining taxation of 2007 and 2013.

But Fonseca said that most of the companies have so far paid nothing at all. The other coal mining companies that ought to have paid are the Anglo-Australian company Rio Tinto, Jindal of India, and Minas de Moatize (owned by the British company Beacon Hill).

“We have to work harder to convince the companies to hand over the revenue”, she said. Several meetings with company representatives have been held, but the three companies are still not respecting their legal obligations to the communities.

“Because there's been no consensus, we've asked for support from the central authorities to overcome the problem”, added Fonseca.

However, the money paid by Vale had made it possible to finance 14 community projects in agricultural marketing, general trade, and poultry farming.

320 permanent and seasonal jobs were created, and an agricultural service centre was set up in Tete, equipped with seven tractors to assist peasant farmers.

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