LONDON, May 10 (BERNAMA-NNN-AIM) -- Mozambique's President Armando Guebuza has told an audience at the prestigious Royal Institute of International Affairs here that the priority of his government is to make sure that wealth derived from the huge expansion of mining activities serves the people, and that in relations between the mining companies and the government "we are setting the rules".

In his speech Wednesday, the president admitted that the country had a lot to learn, in order to improve the conditions of people resettled to make way for mining projects and to protect the environment. But he stated that with the help of experts, such as those working at the Commonwealth Secretariat in London, the government was learning and improving.

Over the last few years there had been criticism over resettlement, but President Guebuza reminded the audience that before independence many people were forced by the Portuguese colonial authorities to move to make way for the Cahora Bassa Dam on the Zambezi River.

These people were moved away from fertile land to areas where they had to seek paid employment, providing a source of cheap labour.

In contrast, those moving today were receiving better housing and services such as health and education. He conceded that things could still be improved, but argued that this was a learning process and the government was listening to the people.

He used the example of Cateme in Tete Province, where people had protested against the Brazilian mining giant Vale because the houses that they were given were too small and in a poor state of repair.

Following this, the provincial government had taken the step of requiring mining companies to provide two-bedroom houses for those to be resettled.

The provincial government had also demanded that these houses provide a bathroom, piped water and electricity, as well as a spacious yard.

This was made possible because the central government had devolved to provincial level more powers to make companies abide by social responsibility programmes.

President Guebuza warned that despite all the current focus on the development of coal and gas, the government must not lose sight of the need to develop other sectors.

He reminded the audience that over the last decade, the country had maintained a growth rate of above 7.0 per cent a year.

Mozambique has huge coal reserves, and could be exporting a hundred million tonnes per year within the near future, subject to the building of new rail routes and ports. It also is on course to launching gas production in the Rovuma Basin in the far north.

President Guebuza stressed that in order to avoid problems with fluctuations in commodity prices it was necessary to use some of these resources internally to diversify the national economy.

It was possible that within 10 to 15 years Mozambique would become a middle income country, he said, adding that "the right not to be poor is an inalienable right". The government's main concern is that the people should benefit from growth through the expansion of services and jobs.

He concluded by stating that following the 16-year war of destabilisation, with over a million dying and 4.5 million people being displaced, no one could accept violence as a solution to the country's problems.

-- BERNAMA-NNN-AIM