Mozambique: Fourteen mining companies fined

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Mozambique: Fourteen mining companies fined

7:38 CAT | 26 Jul 2023

FILE - For illustration purposes only. [File photo: Twitter]

A total of 14 mining companies were fined by the Inspection-General of Mines in Mozambique for failing in June to declare the quality of the ores they produced, the entity told Lusa on Thursday.

The Inspector General of Mines at the Ministry of Mineral Resources and Energy, Obete Matine, said that the fines were the first imposed on mining operators for lack of information about the quality of their production, a requirement stemming from a decree that entered into force recently.

“The taxation decree in the mining area determines that the submission of declarations for the mining production tax must be accompanied by a report and documentation containing specifications of the quality of the product extracted,” Matine explained.

He gave as an example that a company that produces coking coal, used in the steel industry, must specify the quality, in order to allow a reliable calculation of the price and the tax to be paid.

Obete Matine pointed out that the Mozambican state had in the past lost large sums in taxes due to lack of knowledge about the quality of exported ores and their market value.

Of a total of 18 companies that extract coal, graphite and heavy sands in Mozambique, 14 had been fined, Matine said.

He did not advance the amounts of the fines imposed on offenders, but noted that pecuniary sanctions are multiplied by the national minimum wage.

He noted that the products mentioned are the first to be subject to the new rules, with other areas to be covered progressively.

Obete Matine said that some of the companies penalised had already paid the fines, and that the others were expected to comply within the legally stipulated deadlines.

Earlier this month, the Mozambican government accused mining companies of declaring less production than the actual figures in order to obtain “very low” tax bills, demanding that the sector increase its tax contribution and participate more fully in the development of the country and communities.

The position of the Mozambican executive appears in the summary of a meeting that members of the government held with representatives of companies in the mining sector recently.

In the document, to which Lusa had access this Thursday, the Mozambican authorities consider that “half of the exports that occur in Mozambique result from mining, but this quantity of exports is not reflected in taxes, which are very low”.

Several internal and international reports have accused multinationals operating in Mozambique’s extractive sector of declaring production figures below what they actually export from the country.

Source: Lusa