South Africa’s Tsozo Refinery plans to develop a gold processing facility in Mozambique having been granted an exploration licence in the country, Reuters reports.

The firm will spend $17.5m to establish the facility, which will commence operations by the end of 2010 and process nearly 320kg of gold a day.

Mozambique mining director Eduardo Alexandre told Reuters that the company had been given a licence to build a gold plant in the Manica province.

“It will allow them to set up satellite posts in any part of the country to buy unprocessed gold given the fact that we have a lot of illegal gold panning activities,” Alexandre said

Alexandre said the government was encouraging domestic and overseas companies to conduct exploration activity for gold after banning the export of gold ore.