GRAFEX ANCUABE GRAPHITE MINE PROJECT: ANCUABE, MOZAMBIQUE SOCIAL IMPACT ASSESSMENT REPORT Prepared for: GRAFEX, LIMITADA. 25 Setembro Avenue nº. 1383, 6º floor, Flat 613, Maputo Moçambique www.tritonminerals.com Prepared by: COASTAL & ENVIRONMENTAL SERVICES MOZAMBIQUE LDA Avenida da Mozal, Porta 2334 Beluluane Celula D. Quarteirao 02, Matola Cidade, Maputo, Mozambique With offices in Cape Town, East London, Johannesburg, Grahamstown and Port Elizabeth (South Africa) www.cesnet.co.za SEPTEMBER 2017 Report Title: Grafex Ancuabe Graphite Mine Project: Social Impact Assessment Report Version: Draft Consultant Responsibility Signature Date Marc Hardy Study Leader/Reporting 17 September 2017 Amber Jackson Review 18 September 2017 COPYRIGHT INFORMATION This document contains intellectual property and proprietary information that is protected by copyright in favour of Coastal & Environmental Services (CES) and the specialist consultants. The document may therefore not be reproduced, used or distributed to any third party without the prior written consent of CES. This document is prepared exclusively for submission to Grafex Lda and is subject to all confidentiality, copyright and trade secrets, rules intellectual property law and practices of Mozambique. This report should be cited as follows: CES, 2017. Social Impact Assessment: Grafex Ancuabe Graphite Mine Project. [Unpublished]. Maputo. Social Impact Assessment NON TECHNICAL EXECUTIVE SUMMARY INTRODUCTION Grafex Limitada (Lda) have proposed the development of the Ancuabe Graphite Project located in the district of Ancuabe in Cabo Delgado Province, northern Mozambique. The Ancuabe Graphite Project spans across three adjacent mining licenses. In 2017, Coastal & Environmental Services (CES) was appointed by Grafex. (hereafter referred to as Grafex or ‘the company’) to conduct an Environmental, Social and Health Impact Assessment (ESHIA) to secure environmental authorisation from Mozambique’s Ministry of Land, Environment and Rural Development (Ministerio de Terra, Ambiente e Desenvolvimento Rural: MITADER). The project area spans three adjacent exploration licenses (EL5305, EL5336, EL5380) currently held by Grafex. Combined, three areas cover approximately 51,094ha however the project area DUAT applications for this project will cover a much smaller area of approximately 9,000ha. The exact size of the pit that will be mined is still to be determined and will depend on the outcome of the resource surveys that are currently being undertaken. This Social Impact Assessment (SIA) forms part of the ESHIA for the Ancuabe Graphite Project (hereafter referred to as ‘the project’) conducted in accordance with the Regulations on the Environmental Impact Assessment (EIA) process (Decree 54/2015 of December 31). The proponent is in the process of applying for Environmental Authorisation (EA) from the Government of Mozambique (GoM). The ESHIA and specialist studies are submitted at the national-level to the Ministério Da Terra, Ambiente e Desenvolvimento Rural (MITADER) for decision-making. OVERVIEW OF THE PROJECT AFFECTED COMMUNITIES Project Affected Communities (PAC) refers to communities that are affected by the proposed project through either primary (direct) or secondary (indirect) effects. The distinction between direct and indirect PAC is a function of the extent and severity of the anticipated positive and/or negative impacts induced by the project on the particular communities. It is apparent from the study findings that the majority of PAC households essentially engage in livelihood strategies that are almost fully subsistent in nature, and notably, agricultural activity dependent. People are poorly educated, with few of the surveyed adults having completed senior secondary (high) school, and very few of these subsequently attaining a tertiary education or some form of vocational training. People also lack skills that might otherwise be able to set them up in the wider economic market. As such, it is expected that the local labour pool can supply the project with largely unskilled candidates only. The study area is also lacking in terms of public goods and service provision. Government capacity to deliver on these mandates is limited despite their best intentions. As a result, the study area inhabitants display an expected low level of basic or high school education, only access health services in times of emergency, and are mostly isolated from centres or towns where these limited services are available. Understandably access to land, and the cultivation thereof, is crucial for household survival. The majority of the surveyed households obtained land tenure through their Traditional Authority with over a quarter of these inheriting these tenure rights. A minority of surveyed households indicated that they rent land parcels for agricultural production (note that the potentially affected farmers along the proposed access route and inside the mining tenement report that they do not pay rent for this land), paying this rent by means of reciprocal exchange of household labour, indicating the existence of an informal system of labour exchange between these households. Very few people are employed in the formal sector, with regular employment being limited to the mining and public sectors. As such, non-regular work and the informal sector plays a substantial role in the respondent households’ daily economies (trading, farm labour, craftsmanship, charcoal production etc.). Two thirds of households receive their incomes from agricultural production. Income i Social Impact Assessment from regular employment (mostly referring to formal employment with fixed salaries), has been recorded by only 7% of households. Agricultural produce is largely for household consumption, with a minority of households reporting to be selling all their crops. Cassava, beans, cereals, legumes and vegetables are the primary crops being planted and harvested in the area. Many crops are also intercropped, especially such as beans and other vegetables. Natural resources are similarly harvested for own consumption, with limited sales thereof reported. Food intake is high in starch and is often shared between households, especially in the periods between agricultural harvests - a key food insecurity coping response in times of stress or shortage. Many household respondents stated that they do not have sufficient food to eat, with the months February to April, being the period of highest food insecurity. Animal husbandry and fishing are not large contributors to household food security or their overall livelihood strategy. Few households seem to own and raise livestock, or hunt bush meat for commercial gain, but rather for household subsistence needs. The study area PACs are surviving by pursuing a variety of livelihood strategies, mixing subsistence and cash-based pursuits (such as charcoal production), of which subsistence agriculture is the most crucial. In addition to agriculture, people rely heavily on their environment for the collection of a wide variety of natural resources, for a range of reasons, such as food, medicines, fuel, house building materials, etc. These resources are collected mainly, but not only, by women, and form a significant additional component to households’ nutrition and general needs basket. As such, any proposed project activities that could impact or curtail these livelihoods strategies and income sources will need to be understood by the proponent. There are vulnerable households present amongst the direct PAC and the project will need to identify and monitor these that may be impacted by project activities. ISSUES AND CONSIDERATIONS Both indirect and direct economic opportunities will be created as a result of the proposed project. Should the services from the surrounding area and villagers be used, the project should increase the amount of cash-flow into the affected villages and smaller settlements within the greater project area, and may further create opportunities for the sale of goods and services to the mine and mine employees. With the upgrading of services and access roads to site, this might potentially improve access and basic service provision for residents in the project area. The following benefits can be realised: Economic opportunities: both indirect and direct opportunities will be created (improved access and increase in amount of cash inflow to village in the immediate vicinity of the mine; upgraded services and road infrastructure; potential improvements in access and basic service provision for residents; and direct economic benefits from employment). Employment benefits: and an increase in the skills base in the area. However, the general lack of skills in the study area reduces the permanent employment opportunities available to local residents unless they are subject to skills training and capacity building by the project. Social development: initiatives are to take the form of a dedicated Social Development Plan (SDP) to be developed by the company, in consultation with key stakeholders. The project will result in direct economic benefits at both provincial and national levels and any income generated from the mining operation will significantly increase the country’s tax-base A Resettlement Action Plan (RAP) is currently being developed to address all farmers potentially affected by project activities. The areas under cultivation that may be affected will be remunerated through a compensation framework for affected farmers will be developed in conjunction