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Contingency planning key to mitigating mining risks

Lara Smith at a mining site in Mozambique.

LARA SMITH Mozambique’s graphite is essential to global battery supply chains, particularly in the electric vehicle and energy storage segments

6th June 2025

By: Devina Haripersad

Creamer Media Features Reporter

     

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Following the post-election protests and attacks that disrupted Mozambique’s mining sector in October 2024, specialist consultancy Core Consultants is advising companies to stockpile key materials, secure alternative export routes and strengthen early-warning systems and security protocols to mitigate future risks.

Mozambique’s fragile security environment, particularly in the insurgency-affected northern regions, continues to pose serious challenges to mining operations and mining- related logistics, Core Consultants CEO Lara Smith tells Mining Weekly.

“Armed conflict in Cabo Delgado has impacted [on] mining transport routes and staff safety, creating major disruptions in areas like graphite production. Political unrest, such as the post-election protests of 2024 . . . damage[s] . . . investor confidence. These risks increase operational costs and require contingency planning for workforce evacuation and supply chain management.”

Therefore, Smith emphasises the need for companies to prioritise robust labour relations, establish effective grievance mechanisms and adopt inclusive workforce policies.

Further stabilisation of operational environments can be achieved through company- led investment in local infrastructure, such as roads and housing, while stronger collaboration with government can help secure supply corridors and allow for a swifter response during periods of unrest.

Smith also highlights that comprehensive business continuity plans, including phased shutdown strategies, still remain essential to ensuring businesses have contingency plans for unplanned, or otherwise abnormal, events.

“Lessons from Mozal and Balama show the importance of preparation and flexibility. Resilience planning must be embedded from the project design phase.”

Risks in Mozambique can be managed through proactive community engagement, robust security planning and clear agreements with government authorities.

As for safeguards against unforeseen situations, Smith adds that political risk insurance and long-term stakeholder commitments are key.

ESG Integration

Building local partnerships and employing local labour reduces conflict potential and fosters goodwill, explains Smith, adding that investors should ensure compliance with environmental, social and governance (ESG) frameworks, and prepare for challenges to a mining company’s social licence early on.

Mozambique faces elevated ESG risks, compared with other African mining jurisdictions, primarily owing to armed conflict, weak environmental regulation and community tensions linked to poverty.

Smith further describes Mozambique’s ESG outlook as mixed, adding that it shows positive signs of evolution – the country is performing relatively well in terms of policy stability and, to date, has avoided abrupt regulatory changes.

Transparency is steadily improving, supported by Mozambique’s participation in the Extractive Industries Transparency Initiative, while several leading Mozambican operators have adopted best-in-class ESG standards.

Companies such as graphite-focused miner Syrah subsidiary Twigg and gemstone miner Gemfields have earned recognition for their efforts in community development and transparency, she adds.

Despite recent disruptions, Smith says there are reasons for optimism, with Mozambique’s offering “promising opportunities” in graphite, rare earth minerals, vanadium, gallium, coal, gold and gemstones.

As for new mine development, the country’s underexplored geology presents strong upside potential for new discoveries, while demand for critical minerals in battery and green technology supply chains also aligns with its resource base, presenting further upside potential.

In terms of investment attractiveness, Smith adds that improved government incentives, including reforms to investment laws and support for in-country processing, enhance Mozambique’s appeal, with investor interest rising in projects that can scale rapidly and integrate with international supply chains.

The graphite extracted in Mozambique is essential to global battery supply chains, particularly in the electric vehicle and energy storage segments, with projects such as Syrah’s Balama operation having established the country as a leading graphite supplier outside of China, states Smith.

Edited by Donna Slater
Features Deputy Editor and Chief Photographer

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