African agriculture company Obtala Resources Ltd on Wednesday welcomed the decree issued by the Mozambique government suspending the authorisation of any new requests for logging areas in the country, saying the move will not effect its existing concessions.
Under Mozambique law, two forms of forestry exploitation licences can be issued. One, a “simple licence”, is issued for operators to cut down trees but with no obligation to process the timber. The new decree relates to the award of these “simple licence” approvals.
The second type of licence is a “forestry concession licence”, which involves larger areas and under which operators have to operate within strict permitted cut allowances and must process the timber inside the country.
The suspension by the government of the new “simple licence” awards will not effect Obtala, it said, as its licences in the country are held under the forestry concession contracts.
The group added the restructuring of its timber operations is ongoing.
Shares in Obtala were down 20% to 5.1755 pence on Wednesday.
Source: London South East