Government officials remain positive about the outlook for Mozambique’s mining sector, but it is likely to be affected by the global downturn and falling commodity prices. Speaking at the World Economic Forum in January 2009, Mozambique’s Prime Minister Luisa Dias Diogo said the country’s economy should grow by 6.5-7% in 2009, and that the downturn would be countered by higher agricultural input and aid flows. The national director of Mining Resources, Fatima Momade, said in July 2008 that the mining and oil sectors should be the primary drivers behind GDP growth hitting around 15% by 2010 – it is unclear whether this figure has been revised. Momade was upbeat on the prospects for the Moma and Chibuto minerals projects and the Moatize coal project. Some US$217mn was invested in the country’s mining sector in 2007, up from US$169mn in 2005, but it seems unlikely that this upward trend will hold. The government is also taking steps to speed up the awarding of mining licences by putting maps detailing existing licence holders online. At present, prospective miners must apply for mineral licences from local directorates, who then have to go manually search paper records to check whether the area has already been sold off; however, unconfirmed reports in January 2009 suggest that the government may cancel all mining licences held by companies not mining the areas granted to them. The government is prioritising the provinces with the most mining activity (such as Manica, Tete, Zambezia and Nampula), but hopes to have the entire country mapped eventually. There are several high-profile mining projects underway in the African nation, including Vale’s US$1.5bn Moatize coal project, Kenmare Resources’ US$450mn Moma titanium project and Corridor Sands’ Chibuto heavy mineral sands project. However, reports at the time of writing from the Mozambique News Agency suggest that the latter project may be put on hold for several years. Since 2003, the mining industry of Mozambique has attracted increased attention from the private sector. Capital inflows have surged and a number of companies from countries such as South Africa, Russia, Brazil and India are buying stakes in mines throughout the country, signifying the emerging importance of Mozambique’s mining industry in its economy. Direct investments in mining increased from US$101mn in 2004 to US$804mn in 2008, according to the government. The diverse geology of Mozambique offers a range of minerals and metals including gold, uranium, titanium, coal and bauxite. The Manica belt spanning western Mozambique is the primary source for the country’s gold, copper, iron ore and lead resources. High-grade bauxite is also found here. In spite of the myriad natural resources that Mozambique hosts, the country suffers from certain infrastructural and systemic flaws. Corruption is high and the labour market is restrictive. Setting up business takes longer compared with other nations in the region, and bureaucratic delays worsen the situation. Mozambique also needs to intensify its efforts to build good infrastructural facilities that will support industrial growth. On the positive side, the government of Mozambique has taken several steps to enhance the prospects of its mining industry. The state has embarked on a mineral export promotion programme to boost its depleted foreign exchange reserves. Furthermore, government policies over the forecast period are focused on improving the administrative structure of mining operations, as well as upgrading the health and security provisions. Fatima Momade, national director of Mining Resources, also said in July 2008 that the main challenge for the government was to ensure the correct reform of current legislation. The country’s mining laws have been established with the objective of leveraging its vast mineral base to boost its overseas revenues via large-scale exports. Moreover, since the country houses a substantial number of artisanal miners, the mining laws also aim to promote small-scale mining in the country. Two types of taxation apply to mining operations in Mozambique: production tax and surface tax. Production tax is based on the value of mining output and surface tax is owed annually by all holders of exploration licences or mining concessions, and is determined on the basis of area.