Washington — The World Bank today approved a US$18 million credit to support a Mineral Resources Management Capacity Building Project to be implemented by the government of Mozambique. The project has been designed to alleviate poverty in areas of small-scale and artisanal mining and to encourage the expansion of private investment in mining in a socially and environmentally sound way.

Specific project objectives include:

· Improving the legal and regulatory reform to help establish an enabling environment to promote private investment into mining;

· Institutional capacity building to develop capabilities to effectively enforce laws and regulations, administer mining titles, and monitor the sustainable development of small-scale mining;

· Development of a data bank and geological maps to strengthen the government's capacity to make essential geo-scientific and natural resources information available to potential investors;

· Institutional strengthening to establish capacity in the country for environmental management, and to develop the understanding of and the capacity to address social impacts from mining; and

· Identify and adopt appropriate mechanisms to increase revenues and improve the quality of life in selected areas with a strong concentration of artisanal miners.

Mozambique has a variety of natural resources which, if sustainably managed, can provide a good basis for growth. The value of Mozambique's mineral production rose from virtually nil in 1990 to around US$7 million in 1998, of which US$6 million comes from industrial minerals and construction materials, and US$1 million from gold and gemstones. However, most of the activity in gold and gemstones still takes place in the informal sector. The project will help establish a modern, consistent and homogeneous mining legal and regulatory framework conducive to private investment, and provide a better understanding of how government, private sector, communities and donors can work together to improve the living standards of affected communities.

The Mineral Resources Management Capacity Building Project will be financed by a US$18 million credit from the International Development Association, the World Bank's lending arm for the poorest countries. The IDA credit is on standard terms of 40 years maturity, including 10 years grace. The government and other donors will finance the project with an additional US$14 million.