9th Mar 2026 12:08
(Alliance News) - Kenmare Resources PLC on Monday said it is "concerned" by the move from Mozambique's tax authorities to impose new terms on its Moma Titanium Minerals mine, which include the revocation of the industrial free zone status.
The company is seeking to "urgently" engage with the government of Mozambique "both on the position regarding implementation of the internal resolution and to conclude an agreement for the renewal of the implementation agreement", aiming to finalise negotiations by March 20, or it may have no alternative but to resort to international arbitration.
Mozambique's officials were instructed in late January to apply the conditions originally set in a government internal resolution adopted by the council of ministers last July. While granting Kenmare a 20-year concessions extension, the terms included an acceleration in royalty rate increases to 3.5%, the revocation of the industrial free zone, and limits on exemptions from customs duties and import value-added tax to capital equipment and spare parts.
Kenmare said these terms have not been agreed to, differ "significantly" to what it's contractually entitled, and would be detrimental to its interests. It also said it protested "in the strongest terms" to government representatives and was working in the understanding that such terms would not be imposed as negotiations were still underway.
"The loss of the IFZ status implies that VAT would be applicable to certain transactions by KMPL that have historically been exempt. These could include the purchase of Heavy Mineral Concentrate by KMPL from Kenmare's mining company, Kenmare Moma Mining (Mauritius) Ltd, and other major inputs, including fuel and electricity. While it is expected that this VAT would be recoverable, it would impose working capital requirements to fund a period of uncertain duration between payment and reimbursement of the VAT," the company said.
It also added that the loss of industrial free zone status may restrict its abilities to operate offshore bank accounts, making it liable to pay additional taxes including on profit.
"While some or all of these potential implications may not have been intended, or may not ultimately be implemented, no clarity of application or confirmation of intent has to date been provided by the government to Kenmare," the Dublin-based mining company said.
Kenmare said it will discuss the effects of the situation with its lenders covered by senior facilities agreements, and if necessary will request waivers or confirmations "at the appropriate time".
Managing Director Tom Hickey said: "We are very concerned by the Mozambique Tax Authority's recent attempt to impose terms that have not been mutually agreed with Kenmare. This action contrasts with the outcome of a meeting with various ministers and other government representatives last month where it was agreed we would work together to conclude negotiations by March 20."
"Our April 2025 proposal to the Mozambique government included several concessions significantly beyond our contractual entitlements...We remain in negotiations with the government and are hopeful of a positive outcome for both sides in the near term. After almost four decades of deeply collaborative partnership...we would be disappointed to have to resort to arbitration to assert our contractual rights," he added.
Kenmare shares were down 7.3% to 235.00 pence each around midday on Monday in London.
By Martin Miraglia, Alliance News reporter
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