Approval of the New Mining and Petroleum Laws

The Parliament recently passed Law No. 7/2026 of 3 June, which enacts the new Mining Law, and Law No. 8/2026 of 3 June, which enacts the new Petroleum Law. These legislative reforms, promoted by the Council of Ministers, form part of the modernisation and strengthening of the legal framework governing the management of the country’s natural resources, with a view to reinforcing economic sovereignty, promoting a more sustainable exploitation of mineral and petroleum resources, and maximising the economic and social benefits for Mozambicans

1. Objectives of the Laws

   
   

The legislative reforms aim to reinforce the State’s sovereignty over natural resources, promote industrialisation through the local processing of minerals and the allocation of oil and gas to the domestic market, involve the national business community through preferential mechanisms for Mozambican companies and labour, ensure transparency through the publication of contracts and revenues, and to protect communities with clear rules on resettlement, fair compensation and the allocation of revenues for local development, without neglecting the State’s role.

2. Impact on the Community

With regard to the impact on citizens and communities, the new laws stipulate that concessionaires are obliged to pay fair compensation and to enter into agreements with communities prior to any resettlement.

In the Petroleum Law, these obligations arise from Articles 20 and 21:

• Article 20 (Fair compensation) requires the State to ensure fair compensation, paid by the holders of petroleum operations rights, to individuals or communities holding rights to use and exploit the land or territorial waters; such compensation must be set out in a binding agreement between the operator and the holder of the pre-existing right or the community, with oversight by the competent government body;
  

• Article 21 (Content of fair compensation) stipulates that this covers resettlement in decent housing under better conditions, payment for the value of improvements, the implementation of socio-economic activities to ensure food and nutritional security and the protection of human rights, as well as the preservation of the historical, cultural and symbolic heritage of families and communities.

In the Mining Law, the equivalent obligations are set out in Articles 52 and 53:

• Article 52 (Fair compensation) imposes on the mining licence holder the obligation to compensate those affected by resettlement in a fair and transparent manner; such compensation must be set out in a binding agreement between the mining licence holder and the holder of the pre-existing right or the local community concerned;
  

• Article 53 (Content of fair compensation) stipulates that this comprises resettlement in decent housing under better conditions, payment for the value of improvements to property, the development of activities on which the food and nutritional security of those affected depends, and the preservation of the communities’ historical, cultural and symbolic heritage.

Revenue generated from these resources is partially allocated to the development of producing regions, and companies must widely publicise recruitment opportunities, give preference to the local workforce, and implement succession and capacity-building plans for Mozambicans.

It is important to note that rights acquired under existing contracts, entered into on the basis of previous laws, remain valid until the end of their terms, and legal guarantees for investors, including protection of property and recourse to international arbitration, are preserved.

3. Legislative Innovations

The Petroleum Law introduces the following innovations:

• A minimum non-dilutable 15 per cent stake held by the State, through the National Hydrocarbons Company (ENH), in oil projects, on a ‘free carry’ basis, with the costs of this stake being financed by the concessionaires. Pursuant to Article 35(4), the financing may also cover an additional State participation of up to 40 per cent of the equity interest, until the start of production, in accordance with Article 35;
  

• The State has a right of first refusal in the transfer of oil rights. Any sale or transfer of shares is subject to government approval as provided for in Article 74 of this law;
  

• Foreign companies providing services to the oil sector are required to form partnerships with Mozambican companies, in accordance with Article 60;
  

• Development Plans must allocate a minimum quota of 25 per cent of oil and gas, including liquefied natural gas, to the domestic market, exclusively for domestic consumption; furthermore, all condensate produced is allocated to the State’s representative, free of charge up to the point of delivery, in accordance with Article 53 and subparagraphs (q) and (r) of paragraph 1 of Article 28;

  
  

• The National Petroleum Institute (INP) is strengthened as the Petroleum Regulatory Authority, with decision-making and sanctioning autonomy, licensing powers and other powers in accordance with Article 37;
  

• The publication of contracts and their main terms is ensured by Article 42(6), and the audit of recoverable costs is provided for in Article 86; and
  

• The Petroleum Law also provides that 10 per cent of tax revenue from the Petroleum Production Tax shall be channelled towards the development of the provinces, districts and local communities where petroleum projects are located, in accordance with Article 67(1) and (2)

However, the same will apply to the Mining Law, which introduces the following innovations:

• With a stake across the entire value chain of mineral resources, the State being the sole shareholder – with the role of shareholder exercised by the Council of Ministers – the State’s stake in mining ventures must not be less than 15 per cent, non-dilutable and free of charge to the State, under a ‘free carry’ arrangement, in accordance with Article 47(1), with the ‘free carry’ mechanism expressly enshrined as a clause in the Mining Contract, pursuant to Article 23(2)(a);
  

• The State enjoys a right of first refusal in the direct and indirect transfer of equity interests, securities and/or mining rights, including the transfer of shares, quotas or other forms of participation, in relation to strategic minerals, in accordance with Article 95(3) of the Mining Law;
  

• Reservation of activities such as the marketing and exploitation of construction materials for national citizens imposes obligations regarding training and workforce succession plans;
  

• Requirement that all mineral resources extracted within the national territory be processed within the country, with a view to ensuring value addition, in accordance with Article 39(1), with industrial processing activities being regulated by specific legislation; and
  

• Prohibits the export of unprocessed strategic minerals, requiring that value be added within the country;

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