backExecutive Summary
Mozambique is one of the world’s largest graphite producers and hosts significant deposits of gold, rubies, coal, and heavy mineral sands used in electric vehicles batteries and energy storage technologies. On June 3, 2026, Mozambique’s President Daniel Chapo signed into law a comprehensive revision of the country’s mining regime. The new mining law1All references to the Mining Law are to the proposed revision of the mining law, available at Lei-de-minas-parte-1.pdf. (the “Mining Law”), which replaces Lei No. 20/2014 and was approved by Parliament in May 2026, requires the State — acting through a newly created national mining company, the Empresa Nacional de Minas (“ENM”) — to hold a minimum 15% free-carried, non-dilutable participation in all mining projects at any stage of the value chain. The Mining Law applies to all mining operations and excludes petroleum, natural gas, and associated natural gas.2See Mining Law, Article 3(3), Scope, (“Excluded from the scope of the present law are the use and exploitation of petroleum, natural gas, and associated natural gas.”). The legislation grants ENM exclusive rights over strategic minerals. The government has not yet proposed a list of strategic minerals, but is required to do so within 180 days of the Mining Law’s entry into force. The law further prohibits the export of unprocessed or semi-processed mineral products absent explicit ministerial authorization. The Mining Law does not contain express transitional provisions addressing its application to existing mining agreements, licenses, or pending applications. For investors in graphite and other battery-related commodities, the exclusive ENM gatekeeping role for strategic minerals could fundamentally alter the route to securing mining rights. The reform is consistent with a broader pan-African trend3See King & Spalding, Client Alert, Critical Minerals Snapshot - Key Takeaways from 2026 so far..., June 3, 2026. — observed in the DRC, Zimbabwe, Ghana, Tanzania, and Mali — toward greater state capture of mining-sector value.
Key Features of the New Law
1. Mandatory State Participation
The cornerstone of the new regime is the requirement that the State’s participation in mining projects shall not be less than 15%4See Mining Law, Article 44(1), State Participation, (“State participation in all phases of the mineral resources value chain shall not be less than 15% (fifteen percent), non-dilutable, and shall not represent charges for the State.”) at every phase of the mineral value chain, from exploration through extraction, processing, and commercialization, and the parliamentary materials indicate that this percentage may be increased. That participation is expressly described in the legislative text as “non-dilutable” and “free-carried”5Id. — meaning the State is not required to contribute capital and its ownership interest remains unchanged regardless of future capital injections. The ENM, created as a state-owned entity with legal personality and administrative, financial, and patrimonial autonomy, will represent the State in all mining ventures.6See Mining Law, Article 42(1), National Mining Enterprise, (“The National Mining Enterprise, abbreviated as ENM, is hereby created as a public law corporate person, of a business nature, endowed with legal personality, administrative, financial, and patrimonial autonomy, governed by the regime established in the present law and respective statutes to be approved by the Council of Ministers.”). This structure mirrors — and in some respects exceeds — similar regimes in Botswana (15% free carry), Tanzania (minimum 16% non-dilutable), Kenya (10% free carry), and Ghana (10% free carry), benchmarks expressly cited in the legislative record.7See Mining Law, “Explanatory Rationale of the Draft Mining Law”.
2. Local Processing and Export Restrictions
Since 2021, Mozambique has been upgrading two pivotal logistics corridors to improve the nation’s mineral shipping infrastructure and the Mining Law mandates that all mineral resources extracted in Mozambique must be processed in-country.8See Mining Law, Article 37(1), Development of Industrial Activity, (“To ensure value addition, all mineral resources extracted in the national territory must be processed in the country, under the terms to be regulated.”). Operators may only export unprocessed or semi-processed mineral products if they secure specific ministerial authorization, which requires approved plans for eventual local processing. The law empowers the Government to regulate export procedures, processing standards, and control the traceability of the mineral value chain from extraction to commercialization, including traceability requirements from mine to export point.9See Mining Law, Article 27(m), Competences of the Government, (“m) ensuring the traceability of minerals, from extraction, domestic consumption, to export, so as to promote transparency and compliance with fiscal obligations”). A minimum of 20% of mineral production must be dedicated to the domestic market.10See Mining Law, Article 36(1), Domestic Consumption, (“The Government must ensure that a percentage of not less than 20% (twenty percent) of ore produced in the national territory is dedicated to the domestic market to meet domestic consumption needs.”). Industry analysts have noted that Mozambique faces formidable practical challenges in realizing these ambitions — including an expensive and unreliable power supply, limited refining infrastructure, and constrained cross-border logistics — factors that may delay full implementation but do not diminish the legal significance of the proposed framework.
3. Local Content and National Preference
The Mining Law also imposes robust local content obligations across the mining sector.11See Mining Law, Article 39(2), Acquisition of Goods and Services, (The provision of services and supply of goods to mining operations is carried out by national individual or corporate persons, who may associate with foreign individual or corporate persons, in conformity with applicable legislation.”). Goods and services for mining operations must be provided by Mozambican persons or entities, or by foreign entities in association with Mozambican partners, with foreign service providers required to demonstrate that the association results in a substantial contribution to local production or value creation.12See Mining Law, Article 39(3), Acquisition of Goods and Services, (“Foreign corporate persons must demonstrate in the association with nationals that the object results in a substantial contribution to the production or creation of value of goods and services originating from Mozambique or generated by Mozambicans.”). Mine operators must give preference to local goods and services where they are comparable in quality, even if local prices exceed those of imported alternatives.13See Mining Law, Article 39(7), Acquisition of Goods and Services, (“The mining title holder and operator must give preference to local products and services when comparable, in terms of quality, to international products, materials, and services that are available in time and in the required quantities, even if the price, including taxes, is higher compared to the prices of imported goods and services, under the terms to be regulated.”). The rights to prospecting, research, and exploitation of mineral resources for construction are now reserved exclusively for Mozambican nationals or entities wholly owned by Mozambicans.14 See Mining Law, Article 53(1), Promotion of National Entrepreneurship, (“The attribution of prospecting, research, and exploitation rights for mineral resources for construction is exclusively reserved for individual or corporate persons of Mozambican nationality, or entities exclusively held by Mozambicans, under the terms of the present Law and other applicable legislation.”). The Autoridade Reguladora de Minas (“AREMI”), the restructured regulatory authority replacing the former Instituto Nacional de Minas, is charged with monitoring and enforcing compliance with local content requirements.15See generally Mining Law, Article 45, Mining Regulatory Authority. Mining companies must also submit plans for the progressive replacement of foreign personnel with nationals.16See Mining Law, Article 39(5), Acquisitions of Goods and Services, (“The mining title holder and operator must submit a plan for the replacement of foreign individual or corporate persons by nationals.).
4. Social, Community, and Development Obligations
The law mandates community consultation before the commencement of exploitation, and requires local development agreements between the Government, the mining title holder, and the affected community.17See Mining Law, Article 51, Community Involvement, (“Prior information to affected communities about the start of prospecting and research activities, as well as the need for their temporary resettlement for such purposes, is mandatory . . . Prior consultation of affected communities before obtaining authorization for the start of mining exploitation, as well as the need for their definitive resettlement for such purposes, when applicable, is mandatory.”); see Mining Law, Article 21(2)(f), (h), Mining Contract, (“The Mining Contract, in addition to other clauses, must contain at least the following: . . . f) memorandum of understanding between the Government, the mining title holder, and the local community within the scope of local development . . . h) the manner in which the communities in the area of implementation of the mining enterprise are involved in and benefit from the enterprise.”). Further, 10% of fiscal revenues from the Mining Production Tax shall be allocated to the provinces, districts, and communities where mining projects are located.18See Mining Law, Article 35(1), Local Development, (“The percentage of 10% (ten percent) of fiscal revenues from the Mining Production Tax is destined for the development of the Province, District, and local communities where the respective mining enterprises are located.”). These revenues will be managed through a dedicated fund to be established by the Council of Ministers.19 See Mining Law, Article 35(2), Local Development, (The percentage referred to in the preceding paragraph is allocated to the implementation of structuring projects in the province, district, and local communities where the mining enterprises are located, the management of which will be carried out by a Fund to be regulated by the Council of Ministers.”). Mining operators are required to prioritize hiring and training a local workforce, publish recruitment notices locally, and submit periodic reports on social responsibility and human rights compliance.20See generally Mining Law, Article 52, Hiring of Local Labor.
5. Contract, Renegotiation, and Dispute Risk
The law permits international arbitration among the available dispute resolution mechanisms in mining contracts, alongside conciliation, mediation, and expert determination.21See Mining Law, Article 21(2)(g), Mining Contract, (“The Mining Contract, in addition to other clauses, must contain at least the following: . . . g) dispute resolution mechanisms, including conciliation, mediation, expert assessment, and international arbitration”). The law also codifies a broad renegotiation clause — reflecting the civil law doctrine of changed circumstances — pursuant to which the State may seek to renegotiate mining contracts where there has been an “alteração substancial das circunstâncias” (substantial change of circumstances) affecting the economic, financial, environmental, technological, or legal basis of the contract, including shifts in reference market prices and “ganhos extraordinários” (extraordinary gains).22See Mining Law, Article 21(5), Mining Contract, (“The grounds for renegotiation include, among others: a) the protection of public interest; b) substantial changes in market circumstances; c) legislative or regulatory modifications with a direct impact on the fiscal, environmental, or operational charges of the project; d) extraordinary gains; and e) the occurrence of prolonged force majeure events exceeding 6 (six) months.”). The law also permits renegotiation on the basis of prolonged force majeure events exceeding six months.23 Id. The breadth of the renegotiation triggers – particularly the express reference to “extraordinary gains” – creates an asymmetric risk profile in which the State retains a standing option to reopen contractual terms at the point of project success. For major mining companies and international lenders, this may fundamentally undermine the bankability of Mozambican mining projects under conventional project finance structures.
What Investors Should Expect
Existing Projects
A critical and as-yet unresolved question is whether the Mining Law applies to existing mining projects and agreements. The legislative text does not contain express transitional provisions, a savings clause, or a defined cut-off date addressing its application to existing licenses, concessions, or pending applications. Until implementing regulations provide clarity, existing project stakeholders should review concession terms, shareholder arrangements, and stabilization protections as a priority.
Broader Commercial Implications
Mandatory partnership with ENM, local content and export requirements, and accompanying local processing commitments are likely to impact project economics and returns. Community development obligations — including the local development agreements — add compliance layers to the project lifecycle. The renegotiation clause introduces a persistent overhang for any project that performs above original projections, and the breadth of the State’s reserved powers to seek renegotiation may deter lenders accustomed to stabilization commitments. The law’s practical effect will depend heavily on the implementing regulations, the operational capacity of the ENM, and the Government’s approach to existing concessions and applications.
Next Steps
The Mining Law was signed into effect on June 3, 2026. The Government is required to promulgate implementing regulations and publish a strategic minerals list within 180 days of the Mining Law’s entry into force.24See Mining Law, Article 27(v), Competences of the Government. (“Within the scope of implementation of the present law, the Government is responsible for: . . . v) regulating the present Law within 180 days from the date of entry into force.). Mining companies, investors, lenders, and contractors with current or prospective exposure to Mozambique should closely monitor these developments. Existing project stakeholders may wish to prepare for potential renegotiation demands and assess their contractual and treaty protections. Stakeholders at the development or offtake stage should model the new costs of doing business in Mozambique’s natural resource sector.
Additional Contributors: Erdem Evranos