Announcements - 4th January 2001
Kenmare Signs Mineral Licence Agreement Over Moma Titanium Project
Kenmare Resources plc and the Mozambican Government have signed a Mineral Licence Agreement (MLA) covering the Moma Titanium Project. 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 and is an important component in the Definitive Feasibility Study due to be finalised early this year.
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.
For tax purposes, the Moma Titanium Project is covered by a mining regime and a processing regime. The approval of the processing regime, known as the Industrial Free Zone (IFZ), was announced on 20th December 2000, establishing favourable fiscal terms. The MLA provides that the mining operations will also be covered by concessionary fiscal terms. Both regimes exempt all activities from import duties, export duties and value added tax. Under the IFZ regime, no corporation tax is payable and a 1% turnover tax is payable after year 6 of production. Under the mining regime, a royalty of 3% is payable on the value of the mining production. The combined effect of these regimes will result in an extremely low effective rate of tax for the project.
Mozambique has established itself as an attractive location for direct inward foreign investment. It has prioritised natural resources as an area for rapid development and has provided a progressive fiscal and regulatory environment. In this context, the Kenmare Moma Titanium Project has received excellent support from the Government of Mozambique in the completion of the MLA and IFZ.
Charles Carvill, Kenmare's Chairman, said:
4 January 2001
For more information:
Michael Carvill
Managing Director
+353-1-671 0411 or +353-87-6740110
Tony McCluskey
Financial Director
+353-1-671 0411 or +353-87-6740346
