Mining & Implementation Agreements
Kenmare and the Government of Mozambique signed two key Agreements in January 2002, which paved the way for the financing of Kenmare's Moma Titanium Minerals Project. The Agreements are a modified Mineral Licensing Agreement which includes enhanced provisions to protect lenders to the Project and the Implementation Agreement governing the operation of an Industrial Free Zone which covers the processing and exporting aspects of the Project. Together these Agreements provide an attractive tax environment, free access to foreign exchange and guaranteed stability.
In December 2000 the Government of Mozambique approved a favourable tax status for the Moma Titanium Minerals Project. The Project company was granted Industrial Free Zone (IFZ) status, which means that the Project processing plant will be exempt from corporation tax, import duties, export duties and Value Added Tax. The processing company will pay 1% turnover tax after year six of production.
In January 2001 Kenmare and the Mozambican Government signed a Mineral Licence Agreement (MLA). This agreement formally grants Kenmare the right to mine titanium minerals on terms that support the rapid development of the Project. It provides for the conversion of the existing exploration licences to a mining licence which is an important component in the Definitive Feasibility Study. The MLA covers an initial period of 25 years of mining, and is renewable thereafter. It grants Kenmare rights over a total area of 100,518 hectares. This licence includes an initial mining area of 15,240 hectares and allows for significant future resource expansion. The MLA provides rights to Kenmare which will facilitate the operation of the mine and protect the capital investment necessary to create it, including security of tenure, land access, water use rights and employment of personnel.
