MAPUTO – President Daniel Chapo has signed into law a sweeping overhaul of Mozambique’s mining sector, mandating state ownership in all mineral ventures and imposing strict limits on the export of unprocessed resources.
The legislation represents a fundamental shift in how Maputo manages its geological wealth, moving the state from a regulatory role to an active equity partner in the extraction and processing of critical minerals. By requiring a minimum 15% free-carried and non-dilutable stake for the National Mining Company (ENM) across the entire value chain, the government is seeking to ensure a permanent share of profits regardless of the investor’s capital contribution.
This policy pivot arrives as the global energy transition intensifies competition for the raw materials essential to decarbonization. Mozambique is currently one of the world’s most strategically significant suppliers of graphite-a primary component in the anodes of lithium-ion batteries for electric vehicles-ranking behind only China and Madagascar in global production.[2]
The centerpiece of Mozambique’s graphite industry is the Balama mine, one of the largest deposits of the mineral globally. Under the new framework, the government aims to move beyond the mere extraction of ore, pushing for “value addition” within its own borders by encouraging downstream industries such as anode-active material and battery-component manufacturing.
The law, which updates Mozambique’s core mining legislation and associated regulations, prohibits the export of unprocessed and semi-processed minerals unless companies secure specific government authorization through a licensing process overseen by the Ministry of Mineral Resources and Energy under the country’s mining code.[3] This mandate is designed to force foreign firms to invest in domestic smelting and refining infrastructure, creating industrial jobs and capturing a larger portion of the mineral’s market value before it leaves the country.
A Continental Shift Toward Resource Nationalism
Mozambique’s legislative turn is not an isolated event but part of a broader trend of resource nationalism across the African continent, where governments are reassessing decades-old mining contracts that they argue favored foreign corporations over national development.
The shift is most evident in the “battery belt” of Africa:
- Zimbabwe: The continent’s leading lithium producer has implemented strict bans on the export of raw lithium, requiring it to be processed into concentrates or batteries domestically.
- Democratic Republic of Congo (DRC): Kinshasa has aggressively pursued policies to increase local value addition for cobalt and copper, the DRC’s primary exports and critical components for electronics.
- Namibia: Recently introduced similar restrictions on the export of unprocessed critical minerals to stimulate local industrialization.
Mozambique’s move places it more firmly within this club of governments using statutory tools to hard-wire state participation into project economics and to tie export rights to demonstrable local processing.
Beyond graphite, Mozambique is leveraging this new legal framework to manage its significant coal reserves and its gemstone sector, including the Montepuez ruby mine, one of the largest gemstone operations in the world. Officials say the law is intended to create clearer, more predictable rules for strategic projects, consolidating what had previously been a patchwork of contract-by-contract negotiations.
To mitigate the social friction often associated with large-scale extraction, the law introduces a mandate that 10% of all mining revenues be directed into a local development fund. This mechanism is intended to provide direct economic benefits to the communities hosting the mines, addressing long-standing grievances over environmental degradation and lack of local employment. Provincial and district authorities will be responsible for administering these funds, raising new questions about transparency, governance capacity, and how projects will be selected.
The new law builds on Mozambique’s efforts to increase state participation in the mining sector and capture more value from its natural resources. Officials say the previous framework, in place for more than a decade, limited the country’s ability to maximize returns from its mineral wealth.
The transition creates an immediate point of tension for international investors. While the government maintains that the measures are intended to strengthen the management of strategic resources and align Mozambique with peers in the region, it remains unclear whether these requirements will be applied retroactively to existing projects protected by long-term stability agreements or bilateral investment treaties.
For foreign mining conglomerates, the risk of “creeping expropriation” or the forced dilution of equity may complicate future capital investments, particularly in capital-intensive graphite and coal projects. Industry lawyers say investors will be watching closely for implementing regulations and for how the ENM’s free-carried stake is valued in project finance structures.
However, the high global demand for battery-grade graphite provides Maputo with significant leverage in negotiations and may temper threats of capital flight, especially from operators already deeply committed on the ground.
The legislation was approved by Parliament in May and officially entered into force following President Chapo’s signature this week, marking one of the most consequential regulatory recalibrations of Mozambique’s extractive sector since independence.
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