Contract Renewal Deadlock & Operational Risk
Kenmare Resources, operating the Moma heavy- mineral-sands mine in northeastern Mozambique, has entered a critical juncture after its Implementation Agreement for processing and export expired in December 2024. The company remains in negotiations with the government for a replacement agreement—despite several months of engagement, no definitive terms have been finalised and production continues under separate mining licences. Kenmare has publicly reserved the right to invoke international arbitration if the impasse is not resolved, signalling elevated contract and regulatory risk.
Underlying Disagreements & Stakeholder Implications
The primary points of contention centre on royalty rates (proposed increase from ~2.5% to ~3.5 %), procurement and localisation requirements, capital-investment commitments, and social-development obligations in Mozambique. While mining extraction remains authorised under existing frameworks, the processing-and-export regime is caught in limbo—creating ambiguity both for Kenmare’s investment planning and for the government’s expectations around value capture and community benefit.
Governance Signals and Investor Perception
The stalemate at Moma reflects a broader governance challenge: when one leg of the regulatory architecture (export/processing agreements) remains unresolved, the social licence to operate (LTO) and investment certainty weaken. For Mozambique, the outcome will signal how the state balances sovereignty over mineral wealth with the need to maintain favourable conditions for international operators. For Kenmare and other investors, it underscores the importance of early-stage clarity in licensing and contract renewal terms. How this dispute concludes may set precedent for future investments and deepen perceptions of regulatory risk in the region.