TIMOR-LESTE Trends and Developments Contributed by: João Afonso Fialho, Tomás Cabral Anunciação and Teófilo de Jesus, VdA
Background Timor-Leste is one of the world’s youngest coun - tries. After decades of conflict, in 2002 it became the first new sovereign state of the 21st century. Over the last two decades, Timor-Leste’s gov - ernment has been particularly focused on rebuilding public infrastructure (water and sani - tation systems, roads, airports, ports, etc) and trying to diversify the country’s economy, which continues to be highly dependent on oil and gas revenues. Despite all the government’s efforts and the stringent local content policies imposed on the country’s extractive industries, additional investment and policy changes are still required to strengthen the country’s economy, private sector growth, basic infrastructure and services, and human capital for long-term inclusive and sustainable development. Asian Development Bank (ADB) is supporting Timor-Leste’s pandemic recovery and inclu - sive development through a country partner - ship strategy for 2023–2027 that focuses on climate-resilient infrastructure and services and the development of a system that fosters eco - nomic diversification. ADB will also continue to prioritise promoting good governance and institutional capacity, improving knowledge and innovation, and accelerating gender equality in Timor-Leste. Mining Potential Most of Timor-Leste’s mineral resources remain unexplored. According to the Atlas of Mineral Resources of the ESCAP Region published in 2003 by the United Nations Economic and Social Commission for Asia and the Pacific, the target minerals in the country are chromite, copper, copper-gold, gold and silver manganese, as well as some non-metallic minerals such as benton - ite, limestone, marble and phosphate. Battery
mineral reserves such as chromium, cobalt and nickel are also found in Timor-Leste, which may position the country as a key mineral producer in the context of the energy transition movement. Developments in the Industry National legislation Considering the huge potential of Timor-Leste’s mineral resources, the mining industry in Timor- Leste is still at an early stage of development. The government is focused on attracting invest - ment to the sector. The Mining Code, approved in 2021, aims to give investors a robust regula - tory framework (aligned with best international mining practices) through which to invest in the country. The regulations aimed at further devel - oping the rules set out in the Mining Code are currently being drafted and are expected to be approved and published in the near future. The enactment of the Mining Code aims to attract investment to the Timorese mining sec - tor and contribute to the creation of jobs, the improvement of living conditions, the increase of the country’s tax revenues and the diversification of the economy, to reduce the dependency on the oil and gas industry. In March 2023, the Timorese government launched a public tender for the award of mineral rights over 49 concession areas for the explora - tion and mining of metallic minerals, gemstones, industrial minerals, radioactive minerals, rare earths and coal. In November 2023, the gov - ernment awarded licences to four companies to prospect and research 13 mining areas. The creation of the state national mining company, Murak Rai Timor, EP, in September 2023 was also reported as a strong sign from the govern - ment that the mining sector would be ready to start operating at full capacity within a short period of time.
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