The Mozambican government has renewed the agreement governing Kenmare’s operations at the Moma titanium mine until 2044, in return for royalties of up to 5%, investments of €185 million and local processing, the company announced yesterday.

The Irish mining company Kenmare Resources said in a market announcement that the Council of Ministers had approved the extension until 2044 of the rights and concessions covered by the Implementation Agreement (IA) for the Moma heavy mineral sands mine, in Nampula province, northern Mozambique. The extension includes changes to the tax, commercial and investment regimes.

Kenmare Resources added that approval was granted on 13 October and official notification was received by the company on 29 October.

The company has operated the Moma mine since 2007 and says that production from the complex accounts for around 6% of the world’s supply of titanium feedstocks, supplying customers in more than 15 countries with products used in the paint, plastics and ceramic coatings industries.

The IA governs the terms under which Kenmare’s subsidiary Kenmare Moma Processing (Mauritius) Limited (“KMPL”) conducts its mineral processing and export activities. Mining operations at Moma are conducted under a separate regulatory framework.

The initial 20-year authorisation expired in December 2024, and the company had since been negotiating a renewal for a further 20 years, continuing to operate under the previous terms during the interim period.

“Kenmare is delighted that the extension of its rights and concessions under Moma’s IA has been approved,” said its managing director, Tom Hickey, quoted in the same announcement.

Hickey recalled that the company has mineral resources capable of supporting production for “more than 100 years” and said the agreed changes were intended to strike “an appropriate balance between Kenmare’s interests and a greater contribution to Mozambique”.

The changes include a progressive increase in royalties on the company’s gross revenues, currently set at 1%, rising to 3% between 2025 and 2029, 4% between 2030 and 2034, and 5% between 2035 and 2044.

They also provide for a 20% withholding tax on services supplied to KMPL from abroad. This measure will take effect after the signing of the addendum formalising the extension of the agreement and its respective terms.

The company undertakes to invest at least US$200 million in plant, machinery and infrastructure over the 20-year extension period. It will also be entitled to request a further 20-year extension in 2044, under the legislation in force at that time.

It further undertakes to fund and execute social and corporate responsibility projects totaling $50 million over the extension period focused on education, health, transport, communication routes, energy, water and sanitation and to develop opportunities for small and medium-sized companies..

Another clause stipulates that the Mozambican state may directly, or through third parties, acquire up to 20% of KMPL’s annual production for local processing, “at market prices”, subject to two years’ prior notice or another period agreed between the parties.

According to Hickey, “the extension provides Kenmare with the certainty needed to continue investing in Moma” and to “support” its “host communities”, while continuing to generate returns for all stakeholders.

During this process, the company had indicated that it might resort to international arbitration if no agreement could be reached on the new terms, although it had consistently expressed a preference for a negotiated solution.

Kenmare said it is now working with the Mozambican government on signing the addendum to the agreement, which will subsequently be submitted to the Administrative Court as part of the legal procedures required to complete the process.