Mozambique has tightened state control over its mineral sector, raised local processing requirements, and set stricter conditions for foreign capital. The message is clear: investment is welcome, but only on the state’s terms.

A Sharper State Role

Law No. 7/2026, the new Mining Law (Lei de Minas), was signed and promulgated on 3 June 2026 and subsequently entered into force in 2026 (official texts and commentary refer to it as Lei n.º 7/2026, de 3 de Junho, but do not clearly state that 3 June is the effective entry-into-force date rather than the signature/promulgation date). It replaces and updates the previous Mining Law, Law No. 20/2014, which had governed Mozambique’s mining sector for over a decade; the new law supersedes that framework, but public commentary and official summaries describe it as replacing Law No. 20/2014 without explicitly listing “all subsequent amendments” being repealed in one clause. The government designed the law to expand state participation and capture more value inside Mozambique.

Under the new regime, the State is entitled to a minimum 15% free-carried, non‑dilutable equity participation in mining ventures. That stake is held through Empresa Nacional de Minas (ENM), a state‑owned mining company created under Law No. 7/2026. The State’s 15% free‑carried participation applies across the mining value chain, including prospecting and research, extraction, processing, transportation, storage and export.

ENM is mandated by the new law to manage rights over strategic minerals, with the prospecting, exploration, extraction, treatment, processing and marketing of such minerals reserved to the state‑owned mining company. Private investors are required to enter into formal arrangements with ENM to participate in projects involving strategic minerals, in line with provisions reserving these activities to the state‑owned mining company.

What Does the Law Mean for Investors?

The law adds two significant market-access conditions. First, the new law requires that a percentage of no less than 20% of ore produced within Mozambique be allocated to the domestic market to meet domestic consumption needs. Second, the new mining framework mandates local processing of minerals and aims to prevent the export of raw, unprocessed minerals, with bans or strict limitations on exports of unprocessed ores highlighted in analyses of the law.

Together, these provisions push project design toward downstream investment. Investors who planned simple extraction-and-export models will need to rethink their approach entirely.

How Does the Reform Affect Project Finance?

The compulsory free-carried state stake reduces ownership flexibility. It can also complicate project finance structures, particularly where lenders require unencumbered equity as security. However, the law does create clearer rules on local value addition and defines a structured partnership route through ENM.

Mozambique is recognised as an important producer of graphite, coal and heavy mineral sands, according to sector overviews and data cited by the Ministry of Mineral Resources and Energy and independent analysts. Empresa Nacional de Minas (ENM) is a state‑owned mining company created under the new Mining Law No. 7/2026, with its creation and mandate publicly confirmed by the Ministry of Mineral Resources and Energy.

For institutional investors and project developers, the legal text now matters as much as geology. The next critical variables are ENM’s operating model, the content of implementing regulations, and how ministers apply beneficiation approvals in practice. Those details will determine whether the new framework attracts or deters the capital Mozambique needs to develop its mineral endowment at scale.

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