Mozambique Mine Nationalization Bill: A New Test for Asian Resource Security

The "Mozambique Model" of African Resource Nationalism

In March 2025, Mozambican President Filipe Nyusi signed a new mining law requiring the state to hold an ownership stake in any mining project. This move is not an isolated case—from cobalt in the Democratic Republic of the Congo to nickel in Indonesia, resource-rich countries are accelerating legislative efforts to gain a voice in the industrial chain. But for East Asia's industrial engines, Mozambique's choice may bring not only compliance costs but also a strategic anxiety over the security of critical mineral supply chains.

How Does the New Law Work?

According to a report by Pinsent Masons, the law mandates that the Mozambican government must hold equity in all mining projects. The specific proportion has not yet been determined, but the law grants the state "free carried interests" as well as pre-emptive rights. This means that even for foreign companies that have already obtained exploration and mining licenses, the government will automatically become a shareholder when projects are developed or equity changes occur in the future.

The law also requires mining companies to prioritize local employment, local procurement, and submit community development plans. These provisions align with the "resource economy localization" policies widely adopted by resource-rich African countries in recent years.

Asian Companies' African Chessboard

Mozambique boasts world-class graphite reserves (used in electric vehicle battery anodes) as well as large-scale coal and natural gas projects. Asian companies have long been deeply involved:

• China: CNPC and Sinohydro, among others, have participated in the Rovuma Basin natural gas project; some private enterprises have already invested in graphite mines.
• Japan: Mitsui & Co. and others have taken equity stakes in Mozambique's coal exports.
• India: Coal India and private mining companies hold coking coal mines in Mozambique.
• South Korea: POSCO and others have locked in graphite and coal supplies through long-term contracts.

The new law directly undermines the foundation of these investments. Asian companies are typically accustomed to securing resource stability through long-term contracts or controlling stakes, but mandatory state ownership means profit distribution and operational decision-making power may be diluted.

From "Resource Acquisition" to "Risk Sharing"

For Asian mining companies, Mozambique's new law forces them to accept a new business model:

• Valuation challenges: The government's shareholding ratio and valuation method have yet to be announced. If the state takes equity at a discount, original shareholders' interests will be harmed.
• Governance frictions: The government, as a shareholder, may intervene in operations, especially in areas such as environmental protection and local procurement, creating conflicts with corporate efficiency goals.
• Exit barriers: Pre-emptive rights mean that companies need government approval to transfer shares, reducing liquidity.

But the risk is not one-sided. The Mozambican government also faces a shortage of funds and technical expertise—state-owned mining companies often lack international competitiveness. If the new law deters investment, the country's abundant resources may not be monetized.

Chain Reactions for East Asian Resource Strategies

The Mozambique case will further accelerate Asian countries' diversification efforts for resource security:1. China: Accelerate domestic R&D of graphite substitution technologies, while shifting focus to other African countries (e.g., Tanzania, Madagascar) and Latin America. 2. Japan: Strengthen ties with African resource-rich nations through the "Official Development Assistance plus commercial cooperation" model, but may require more intergovernmental agreement exemptions. 3. South Korea: Promote supply chain agreements with "ally resource countries" like Australia and Canada to reduce dependence on Africa.

It is noteworthy that Asia's energy transition needs are redefining which minerals are classified as "strategically critical." The European Union and the United States have already provided subsidies through policies such as the Inflation Reduction Act, encouraging extraction at home or in free-trade agreement partner countries. Mozambique's new law may prompt Asian companies to reassess the extension of their "China+1" strategy on the resource front.