The Mozambican government is imposing reference prices for minerals to close a loophole where mining companies declare less than their real production in order to reduce their tax burden.

As of this month, the value of minerals must be declared according to the reference prices published in the monthly bulletin issued by the Ministry of Finance. August sees the first monthly bulletin published by the government seeking to fight against the under-invoicing of minerals, which has been harming the State to the tune of millions of dollars per year.

According to a Ministerial Diploma, "regarding the export of rubies, for example, the companies that cannot sell its rubies by auction must apply US$265.99 per carat, taking into account the highest price in the auctions held from 1 January to 30 June."

As for titanium-bearing heavy sands, the Diploma says their price will be determined by their mineral content. Heavy sands contain ilmenite, rutile and zircon. The reference price for ilmenite, the diploma says, will be US$425.25 a tonne; for zircon, it will be US$2,205.18 a tonne; while the reference price for rutile will be US$1,706.28 a tonne.

The reference price for gold will be set by the Bank of Mozambique.

Under current legislation, the reference prices are determined by a commission that includes representatives of the Ministry of Finance, the Tax Authority, the National Institute of Mines, the Mineral Resources General Inspectorate, and the Kimberley Process Management Unit.