The AMLA Guiding Template IS a mining law drafting and reference tool that provides guidance on the elements of a mining law covering all potential issues that could be covered in such mining law based on Africa’s present realities. It presents an enhanced starting point for its users by providing a clear and practical foundation on which they can thoroughly consider topical issues supported by sample drafting language as they develop, modify or simply assess mining legislative frameworks that fit each country's unique context. Each topic is described with some indication of its elements and broadly associated issues, followed generally by two sample provisions, each of which is accompanied by an annotation explaining the context, issues, and useful features of the presented language. Most of the examples are drawn or inspired by current mining laws within Africa and where such examples do not exist are sourced from mining laws outside of Africa or drafted de novo. The Guiding Template aims to be responsive rather prescriptive, in order to provide a resource that is sensitive to the distinct character of each African country, its existing legal framework and the specific context in which each mining sector is situated. Consequently, it is crucial to read Section V below on How to Use the Guiding Template. The primary objective of the Guiding Template is informed and transparent legislative reform and completeness and adequacy of the law.
The AMLA Guiding Template IS NOT a model mining law. A model mining law is a proposed set of legislative provisions addressing a specified and cross-referenced set of subjects pre-determined to be both desirable and adequate, and which states who seek uniformity may choose to adopt, in whole or in part. The objective of a model mining law would be to create identical or similar law among a group of sovereign states.
The Guiding Template consists of 212 topics that can be addressed in a mining law. The topics consist of matters commonly addressed in a mining law as well as matters that are the subject of current and salient discourse in the sector. The topics are divided into 5 parts (A through E) as shown in the table below.
Part A: General Topics
Part B: Mineral Rights
Part C: Fiscal Terms
Part D: Environment
Part E: Local Development; Labour;
Table of Contents
Local Goods and Services
B-3. Large Scale
Title of the Law
B-4. Small Scale; Artisanal
Scope of the Law
B-5. Development Minerals
Applying Labour Laws
B-6. [Processing; Trade; Transport]
Reference to other Laws
Remediation of Damage
Mine Workers Rights
Ownership of Resources
Ownership of Geological Data
Capital Gains Tax
Inspection of Mines
Use of Security Forces
Other Fee Exemptions
Records and Reporting
Treatment of Other Minerals
General Offenses and Penalties
Each topic is approached in the same format: a brief introduction to the topic, including a definition and key big picture issues for consideration; two conceptually distinct examples; and two accompanying annotations. In few cases, only one example is proffered, largely on the basis of a common approach to the topic. The topic list of the Guiding Template is designed to be exhaustive and therefore cannot be adopted blindly wholesale by any country. Rather it should, primarily serve as a checklist for issues that are applicable to the local context and users must carry out the due diligence necessary to identify the topics that are responsive to the local context. Each of the 5 sub-parts of Part B of the Guiding Template consists of a list of nearly identical topics that apply to the associated mineral right (e.g. eligibility provisions, rights and obligations of the license holder, specific violations and penalties that attach to mineral right). It is noteworthy to mention that the Development Minerals sections (B-5 and B-6) were developed on the basis of field research that was presented at a symposium in October 2016 at the Africa Union Commission (see Section VI on Who Developed the Guiding Template?).
Generally, each topic has two distinct examples that are drawn from or inspired by current African mining laws as well as other country mining laws or drafted de novo. Examples are edited for clarity and utility, so as to present the reader with a provision that can be understood and replicated or easily tailored for the local country context. These examples are not proffered as the only possibilities to address any given topic, but are simply a small sample of some ways that legislative drafters have incorporated principles and contemporary issues into current legislation. This point cannot be over-emphasized – similar to each topic, it is crucial that each example is understood as an indicative provision and the necessary due diligence be carried out to confirm its applicability or its adaptability in order to achieve responsiveness to the local context.
Each example is accompanied by an annotation, written by an expert member of the Guiding Template Review Committee. Unlike the introduction which discusses the topic broadly, the annotation focuses specifically on explaining its companion example, often highlighting the individual strengths and any potential trade-offs in the approach reflected in the example. The annotation is designed to support readers in assessing each example’s value, helping the reader to determine which factors may be the most salient for a country’s particular mining context.
Proper management of natural resources remains one of the most critical development issues for the African continent and a crucial component of natural resource management is the legal framework under which the mining sector is regulated. The core of this framework is the legislation governing the mining sector (often referred to as the mining law or the mining code). Too often, inadequate preparation and obsolete approaches to reform which focus primarily on resources predominantly mined for global exports (PMGEs) has led to legal frameworks that are unresponsive to the realities that are unique to the local context, thus contributing to a climate in which African countries have been unable to reap the benefits of their resources. This concern has led to heightened government focus on devising more appropriate legislation for managing the mining sector. To support the development of context appropriate legislation, it becomes necessary to support the governments and citizens of mineral rich countries with tools to (a) debate and develop legislation as well as reframe the global discourse around their mineral resources and (b) through the passing of informed legislation, derived from broad citizen participation, create the right environment for the sustainable use of mineral resources for shared prosperity.
Additionally, factors including the reframing of the discourse around natural resource exploitation in Africa by African governments and intergovernmental institutions such as the Africa Union, the trend towards transparency and the growing focus of natural resource investors on investing in countries with more stable, clearly defined legal frameworks, have led to increased numbers of African countries adopting new mining laws since 2000. With more revisions and new enactments expected, particularly in light of the operationalization of continent wide harmonization initiatives such as the Africa Mining Vision, the need for guidelines to assist in addressing gaps in mining legislation continues to be a necessity for African governments seeking to strengthen laws governing their natural resources. The Guiding Template responds to this need.
Foremost, the Guiding Template is distinct from the African Mining Legislative Framework of the AMLA Platform. The Legislative Framework provides user friendly access to all 53 existing mining codes of the African continent in an easily readable and searchable format with a feature that allows for the comparison of the provisions of the law on a country to country basis. Therefore, it presents the laws as they exist and can support the use of the Guiding Template by serving as a research resource for regional benchmarking exercises and knowledge sharing. The Legislative Framework also includes amendments to the mining codes, mining regulations, other related laws and regulations as well as a cross-linkage to resourcecontracts.org for access to publicly available mining contracts.
Complementing the essential work of the African Mining Vision, its Country Mining Vision and other policy harmonization initiatives across the continent, the focus of the Guiding Template is fairly narrow in that it concentrates on providing a list from which a country can choose applicable topics based on an adopted set of policies, structural elements of a law as well as mechanics of how the provisions of the law are written. It is not a policy preparation tool but a law drafting tool.
The African Mining Vision has already identified, increased intra-regional harmonization of laws, regulations and regimes as critical to strengthening governance within the mining sector across in Africa. The Guiding Template seeks to meet this challenge by concretizing a common template of legislative provisions that countries could adapt to achieve both national and regional objectives.
 For example: the ECOWAS Harmonization of Guiding Principles and Polices in the Mining Sector; UEMOA Code Minier; and SADC Protocol on Mining.
Use of Experts
The Guiding Template is a guidance tool. Consequently, it is important that a country intending to use the Guiding Template identify the appropriate technical experts who can best employ the tool to achieve the best outcome. These technical experts should include but are not limited to lawyers, technical sector experts, fiscal experts, environmental and social experts, and regional harmonization specialists.
Furthermore, the Guiding Template as an online tool, is a living document. It will be periodically updated to ensure responsiveness to realities on the ground. Therefore, the use of experts ensures the best interaction with the most current version of the tool.
Essential Cross-Cutting Issues
While the Guiding Template aims to introduce each topic within an individualized, issue specific context, some crucial issues are cross-cutting in their impact across several topics areas. As a result, it is strongly recommended that the following issues be considered for each topic within the Guiding Template:
- Reference to other controlling pieces of national legislation and best practice regimes (other sector laws, e.g. environmental law, labor law, criminal law, forest law, land law, company law, customary law, health and safety standards).
- Reference to ratified multilateral conventions, executed bilateral treaties or other international best practice regimes (e.g. labor standards from the ILO; WTO; BIT; GATTS; EITI, Kimberly Process, RECs common mining instruments (SADC, ECOWAS, UEMOA etc.).
- The principle of periodic review: the mining law should consider providing for a process of updating and revision of the law at reasonable intervals to ensure that the primary legislation continues to be aligned with the country’s development goals.
- Fines for violations should be set at a level that is appropriately punitive for each country, acknowledging that, depending on currency valuation and other factors, this quantity may substantially differ from country to country. The same principle applies with any prescribed jail time.
- Consider ways of ensuring gender equity especially through the eligibility provisions for mineral rights, labor related provisions, and local content/development provisions.
- Ensure proper cross-referencing, as necessary within the law. The GT recommends, not only referencing the number for a cross referenced section but also the subject matter of such section. Such approach ensures that each section is clearly and precisely drafted to address a specific subject matter and eliminates sections that address multiple loosely related issues that are not easily captured in a single title (Christmas-tree provisions).
- Develop clearly defined terms and use such terms consistently throughout the law.
- Ensure proper numbering and consistent structure to all parts of the law.
- While the Guiding Template does not provide language for the dissemination of the law and related regulations, providing these documents to the wider public can help governments with the monitoring efforts. Therefore, making the law, its regulations and subsequent amendments and revisions available to the AMLA secretariat for online dissemination as well as providing hard copies to local governments and institutions is recommended.
Quirks of the Guiding Template
- Mineral Rights refer to any rights, licenses, and permits obtainable under the mining law and are used interchangeably.
- Prospecting refers to, what in some countries are also referred to as reconnaissance, which is the preliminary investigation into the existence of mineral deposits in an area, with little to no impact on the physical environment. Exploration refers to what in some countries are also referred to as prospecting, which is the more extensive investigation into the existence, quality and quantity of mineral deposits in an area and is the stage of activity that precedes the development of the mine and mining of the mineral deposits. The Guiding Template has adopted this approach to recommend the standardization of the stages of mining and related mineral rights across Africa.
- [Country] refers to instances when the language should incorporate the formal name of the country or its short forms, for example, “Republic of X” or “the Republic” or “X”.
- Annotations that state “drawn from” or “inspired by” a specific law simply means that elements of the language of the law were taken to draft the sample language to a large or small extent. It does not purport to carry the substantive meaning of the language in the existing law and may sometimes contrast with the language in the law.
- In rare instances, The Guiding Template presents a singular sample provision such as the examples for on-site procedures requirement for discovery of minerals not under the license or table of contents as such topics do not prompt substantively distinguishable approaches to drafting.
The Guiding Template was created out of (a) series of desk research, design and coordination by the AMLA Team; (b) compilation of legislative provisions, language drafting and book sprint style review and revisions by the GTRC and the AMLA team; (c) field research from sector experts from across Africa who provided the knowledge base for the development minerals section of the Guiding Template in a symposium as Symposium Participants and (d) reviews and recommendations by Technical Reviewers. The Guiding Template is the product of the collaboration between the World Bank with funding from Extractive Industries Technical Advisory Facility (EI-TAF), the Extractives Global Programmatic Support Trust Fund (EGPS), the African Legal Support Facility and the African Union Commission. The symposium on development minerals was held in October 2016 at the Africa Union Commission in Addis Ababa and was co-sponsored by the AMLA project, the ACP-EU Development Minerals Program and the Africa Union Commission. The research papers of the Symposium Participants will be published in a volume by the ACP-EU Development Minerals Program. All contributors made of the AMLA Team, The GTRC, the Symposium Participants and the Technical Reviewers are listed below.
Nneoma Nwogu, AMLA Project Lead, World Bank
John Williams, Senior Legal Consultant for the Guiding Template, Duncan & Allen,
Beverley Mbu, AMLA Project Junior Legal Consultant for the Guiding Template, World Bank
Alexandra Manea, AMLA Project Legal Consultant, World Bank
Matteo Mazzoni, AMLA Project Legal Analyst, World Bank
Nchimunya Ndulo, AMLA Team, African Legal Support Facility
Abdoul Camara, AMLA Coordinator, African Legal Support Facility
Guiding Template Review Committee
The Guiding Template Review Committee is made of global experts with representation from across the mining sector as listed below:
Nicola Woodroffe, Natural Resource Governance Institute (NRGI)
Sarah Orr, Latham & Watkins
Ben Lawless, Latham & Watkins
Scot Anderson, Hogan Lovells representing International Senior Lawyers Program (ISLP)
Charles Afeku, Ghana Minerals Commission
Leonardo Sempertegui, Sempertegui Ontaneda LLP, American Bar Association-UNDP International Legal Resource Center
Julio Guity, independent consultant, American Bar Association-UNDP International Legal Resource Center
Salli Swartz, Artus Wise LLC representing the American Bar Association-UNDP International Legal Resource Center
Nellie Mutemeri, University of Witwatersrand Department of Geology, South Africa
Hanri Mostert, University of Cape Town Faculty of Law, South Africa
Lisa Sachs, Columbia Center for Sustainable Investment (CCSI)
Perrine Toledano, Columbia Center for Sustainable Investment (CCSI)
Sophie Thomashausen, Columbia Center for Sustainable Investment (CCSI)
Development Minerals Symposium Participants
Symposium Participants are African sector experts in government, academia and private practice as listed below.
Daniel Franks, ACP-EU Development Minerals Programme
Charles Afeku, Minerals Commission, Ghana
Mike Akaegbobi, University of Ibadan, Nigeria
Charles Akong, Africa Minerals Development Center, Ethiopia
Oladiran Ayodele, North West University, South Africa
Juanita Ceesay, Sciences Po, Paris/University of Sierra Leone
Abdulrasaq Garba, Nigerian Geological Survey/Ministry of Solid Mineral Development, Nigeria
Amir Lebdioui, University of Cambridge, England
Pontsho Ledwaba, University of Witswatersrand, South Africa
Felix Lilakako, Juristes pour l’Environnement au Congo, DRC
Fiona Magona, MMAKS Advocates, Uganda
Tabitha Maro, ENS Africa, Tanzania
Jean Mballa Mballa, Centre Régional Africain pour le Développement Endogène et Communautaire, Cameroon
Salvador Mondlane, Eduardo Mondlane University, Mozambique
Alexis Muhima, l’Observatoire de la Société Civile Congolaise pour les Minerais de Paix, DRC
Nellie Mutemeri, University of Witswatersrand, South Africa
Paskalia Neingo, University of Witswatersrand, South Africa
Victor Ojakorotu, North West University, South Africa
Alhassan Atta-Quayson, University of Winneba, Ghana
Samuel Tetsopgang, University of Bamenda, Cameroon
Florian Wassenberg, GIZ-BGR, Germany
Lex Africa-Werksmans Attorneys
International Bar Association, Mining Law Committee
Nightingale Rukuba-Ngaiza, Senior Counsel, Legal Vice President, The World Bank
Christopher Bryan Land, Lead Extractives Specialist, Energy and Extractives Global Practice, The World Bank
Boubacar Bocoum, Lead Mining Specialist, Energy and Extractives Global Practice, The World Bank
The Guiding Template is a tool that legislative drafters may utilise in developing legislation, or may serve as an educational device for parliamentarians, mining sector regulatory bodies, and civil society to better understand some of the possible legal arrangements or architecture for the mining sector. Using these materials to develop an actual mining law without the necessary level of skill and experience, deep knowledge of the sector and overall legal architecture of the country concerned as well as its international obligations, would create very serious risks for which the contributors to this Guiding Template are not liable.
Users of this Guiding Template should consult with mining, taxation, public revenue management, environmental, land and other relevant expert lawyers in the applicable country to advise on the appropriateness of suggested provisions. Any suggested provision must be adapted to the specific facts and circumstances of the particular country and its mining sector. In the cases where the country chooses to address a specific topic by drafting its own provision (as provided for in the Template), such country should ensure that its own provisions are well harmonized with the rest of the Guiding Template suggested provisions that are incorporated into its legislation.
While use of the Template is encouraged for the purpose of achieving a clear legal framework for the mining sector, nothing in the Template is sanctioned by the authors or the sponsors of this tool. No party associated with the development of this Guiding Template shall be liable for losses or damages that may result from the use of this document or any portion or variation thereof, or any other materials presented in conjunction with the Guiding Template.
A Preamble or, in francophone countries, Exposition of Motives provides a summary of the primary legislative intent underlying the new law that is useful in interpreting its provisions. The preamble or exposition of motives may or may not be part of the law. In the latter case, it is approved together with the new law and both are printed together in the Official Journal. The length may vary considerably from a very succinct sentence or paragraph immediately following the title of the new act to a very detailed separate exposition of motives espousing the intent behind each chapter or provision of the act. Additionally, a preamble may reference the country’s constitution, treaties, or other significant legal resources from which it draws authority (such as jurisdictional sources in federal states). The preamble can also reference a national policy or charter that has guided the design of the mining law.
Alternatively, a mining law may contain a section on fundamental principles and rules of interpretation of the law. If it contains both, care must be taken to ensure consistency and avoid duplicative pronouncements in different languages that may inadvertently create ambiguity and provoke litigation.
1. Example 1:
The purpose of this Act is to:
(a) repeal and replace the [Old Mining Law], with a new legislation on mining and mineral development, which conforms, and otherwise gives effect, to the relevant provisions of the Constitution;
(b) vest the ownership and control of all minerals in [Country Name] in the State;
(c) provide for the acquisition of mineral rights;
(d) adapt the mining law to the country’s present economic situation and to the recent developments in the mining sector, with a view to ensure competitiveness, transparency, protection of rights, and definition of the obligations of the mining holders, as well as to safeguard the national interest; and
(e) provide for other related matters.
Drawn from Uganda’s mining act (2003) and Mozambique’s mining act (2014), the provisions convey in very succinct language that the act should be read as giving effect to the provisions of the Constitution of the country in effect at the time of enactment and confirms that ownership and control of all minerals in the country are vested in the state and therefore the procedure for obtaining mineral rights from the state is as provided in the mining act (paragraphs (a), (b), and (c)). It also provides insight into the legislative intent for making the law that is relevant to the interpretation of the law (paragraphs (d) and (e)). While paragraph (e) is a catch all phrase which may be deemed overbroad and imbued with discretion, paragraph (d) is more clearly articulated with parameters to the legislative intent.
1. Example 2:
RECOGNIZING that minerals are non-renewable natural resources;
ACKNOWLEDGING that [Country]’s mineral resources belong to the nation and that the State is the custodian thereof;
AFFIRMING the State’s obligation to protect the environment for the benefit of present and future generations, to ensure ecologically sustainable development of mineral resources and to promote economic and social development;
RECOGNISING the need to promote local and rural development and the social upliftment of communities affected by mining;
REAFFIRMING the State’s commitment to reform to bring about equitable access to [Country]’s mineral resources;
BEING COMMITTED to eradicating all forms of discriminatory practices in the mineral industries;
CONSIDERING the State’s obligation under the Constitution to take legislative and other measures to redress the results of past racial discrimination;
CONSIDERING the State’s commitment to take legislative and other measures to implement the [Africa Mining Vision];
REAFFIRMING the State’s commitment to guaranteeing security of tenure in respect of prospecting and mining operations; and
EMPHASISING the need to create an internationally competitive and efficient administrative and regulatory regime;
BE IT THEREFORE ENACTED by the [Legislative Authority], as follows:
Drawn from South Africa’s mining law (2002), this preamble vests the ownership of the minerals in the nation while the state is only a custodian. It also refers to environmental and social goals common to most mining countries, other social goals that are specific to the country, and goals considered important by the mining industry. The law also contains a chapter on fundamental principles which states with greater specificity the key basic concepts underlying the legislation.
This preamble provides a more extensive approach with respect to legislative intent, going beyond the traditional objectives of mining, such as clarity of ownership, processing and investment attractiveness objectives, to include indication of a commitment to a regional mining framework, general environmental and social goals as well as societal aspirations that are specific to the country.
A detailed table of contents, at the beginning or the end of the law, enables readers to quickly identify where in the law to find provisions on specific matters of interest, and is highly valued. It can also be a useful drafting tool by serving as an organizational chart for the law. Alternatively, some laws omit a table of contents but this is not advisable especially where the law contains many sections and runs into several pages.
Article [_] Arrangement of Act
CHAPTER 2:FUNDAMENTAL PRINCIPLES
2. Objects of Act
3. Custodianship of nation's mineral resources
4. Interpretation of Act
5. Legal nature of Minerals Rights, and rights of holders thereof
6. Principles of administrative justice
7. Division of Republic, territorial waters, continental shelf and exclusive economic zone into regions
8. Designation and functions of officer
CHAPTER 4:MINERAL AND ENVIRONMENTAL REGULATION
9. Order of processing of applications
10. Consultation with interested and affected parties
11. Transferability and encumbrance of Mineral Rights (…)
Drawn from South Africa’s mining law (2002), this example is common in many mining laws and provides at the beginning of the law a serial arrangement of the sections of the mining law, divided into various parts and sub-parts according to subject matter. While some laws such as is shown in this example number each provision progressively irrespective of what chapter or section the provisions fall under, others restart the numbering of the provisions that fall under distinct parts of the law.
A key to clear and consistent drafting is the precise definition of terms and the consistent use of those defined terms. Most good mining laws contain in the initial or final chapter, extensive provisions setting out the precise definitions of important words or terms (which are usually capitalized), used in the law and the principles applicable in interpretation of the provisions of the law. Defined terms are particularly important where terms which might be employed in other relevant legislation may be used in the mining law but with a different meaning. For clarity, it is critical that words or terms, once capitalized and defined, be used consistently in their capitalized form throughout the law.
The definitions and interpretation chapter is normally the last part to be drafted as it seeks to explain and provide context for those words or terms as used in the law. Apart from the defined words and terms, the definitions and interpretation section may contain language that serve as guides to interpreting the mining law, especially where a country has no applicable interpretation laws or seeks to apply different rules of interpretation to the mining law.
3. Example 1:
Article [_] Definitions
“Development Minerals” means a subset of Minerals mined, beneficiated and consumed principally in domestic and regional markets as identified in the [Directive of the African Union Commission].
“"Mineral" means any substance, whether in solid, liquid or gaseous form, occurring naturally in or on the earth, formed by or subject to a geological process, but excluding petroleum as defined in the [Petroleum Act], and water as defined in the [Water Act].
This suggested examples of a defined word/term demonstrate that defined words or terms should seek to be as precise as possible and should not use the definite word/term itself in the definition. Defined terms can be numbered but should definitely be alphabetically categorized.
3. Example 2:
(1) In this Act, unless the context otherwise requires —
(a) If for purposes of any provision of this Act any dispute arises as to the question whether any mineral falls within any group of minerals, the Minister shall have the power to determine in which group of minerals such mineral shall fall for such purposes, and any such determination shall be final.
(b) A word or term that is not defined in this [Law][Act][Code] and which is a word or term that is common in the international mining industry shall have the meaning that is attributed to it by the industry.
(c) When interpreting a provision of this Act, any reasonable interpretation which is consistent with the objects of this Act must be preferred over any other interpretation which is inconsistent with such objects.
Drawn from Botswana’s mining law (1999), Namibia’s mining act (1992), Equatorial Guinea’s mining law (2006), South Africa’s mining act (2002), this is an example of an Interpretations section of the law which means that a word or term used in the law will have the meaning provided in the definitions unless the context in which the word or term is used requires that a different meaning is assumed. E.g. “mine” may be construed as a verb or noun depending on the context. Usually, it is clearer to indicate when the word or term has a defined meaning by capitalizing the word or term.
Paragraph (2) is also an interpretation clause that can provide further clarification on who may serve as an arbiter of right meaning should a dispute arise. Minerals are categorized into various groups according to definitions in the mining law. Defined categories include precious minerals, precious metals, industrial minerals, construction materials, etc. This example provides an arbiter in case a dispute arises regarding the categorization of a mineral and consequently proposes to resolve the issue without requiring an amendment of the law.
Paragraph (3) recognizes mining as an international activity and provides international industry norms as a general source than can serve as the arbiter for undefined terms and paragraph (4) seeks to promote interpretation of the law in accordance with the objects of the law. Thus, any interpretation of the mining law which is inconsistent with the objects (preamble or purpose in some laws) of the law is to be disregarded in favour of interpretations that are in accord with its objects.
In civil law jurisdictions, the mining law is typically entitled the “Mining Code” and is generally a comprehensive document dealing with substantive and procedural law as well as sanctions for possible offences. It is expected to be continuously updated, without any change in the title, except for the year. Titles of laws in Common Law jurisdictions are based on the particular issues being addressed by the legislature at each point in time and therefore the laws dealing with various subjects may be found in separate enactments, unless or until they are codified or consolidated in one enactment, e.g. a mining act, mines act, minerals act, minerals and mining act, etc. Ideally, the title of the law should be simple and clearly signify that it is the primary mining law of the country.
4. Example 1:
The Mining Act, 2010
Drawn from Tanzania’s mining law (2010), this title is clear and straightforward.
4. Example 2:
The Mining and Minerals Act, 2006
Drawn from Ghana’s mining act (2006), this example seeks to cover the gamut of issues relating to minerals (i.e. classification, land, geology, ownership, processing, sale, etc.) and their development (exploration, exploitation, etc.) in a succinct manner.
Scope of law provisions generally specify the types of minerals over which the present mining law is applicable, as well as what activities are allowed in relation to the minerals, and how the activities are to be conducted. Typically, such provisions also clarify whether oil and gas deposits are covered or excluded from the application of the law. Scope provisions are more common in Francophone jurisdictions than Anglophone jurisdictions in Africa.
5. Example 1:
This [Law][Act][Code] shall apply to all activities or transactions related to the prospecting, exploration, exploitation, research, processing, transportation and trading of mineral substances; but shall not apply to matters related to oil and gas water, and radioactive materials.
Inspired by language from DRC’s mining code (2002), this provision categorically states the subject matter and range of activities to which the code applies as well as the areas not covered by the code.
5. Example 2:
(1) This [Law][Act][Code] shall apply to and govern the conduct of all mining operations and related activities within the territory of [Country].
(2) The provisions of this [Law][Act][Code] shall apply without prejudice to the [Water Resources Act, Forest Act, Tax Code, Customs Code, Investment Code, Labour Code, etc.]
Drawn from Eritrea’s mining code (1995) and Burkina Faso’s mining code (2003), this provision defines the parameters of the mining law’s applicability and then limits the application of the mining law in relation to typical issues which intersect with mining and are covered by other primary laws on environment, tax, forests, water, etc. as they are more comprehensively dealt with in those laws.
This topic may be addressed in the preliminary sections or the concluding sections of the law. Either way, it is critical that a new law is clear on the status of its provisions in relation to the preceding law and the impact of the current law on any obligations undertaken or rights obtained under the preceding law. Any guarantee of stability of provisions included in the prior law must be taken into account in addressing this topic.
When a new law only modifies a few provisions of an existing mining law, care must be taken to preserve the internal consistency of the law as modified, including the numbering of articles. The mining law as modified should be published in the Official Journal. And when a new law modifies an existing mining law extensively, it is advisable to incorporate both the unchanged provisions and the new provisions in the new law so that a single, internally cohesive text with consistently numbered articles replaces the prior law in its entirety, in order to facilitate understanding of the law as modified.
6. Example 1:
(1) The following enactments are repealed- (a) [Old Mining Law]; and (b) [Specified Related Enactments to Old Mining Law].
(2) Notwithstanding the repeal of the enactments referred to in subsection (1), any regulations made under the repealed enactments shall in so far as they are consistent with this [Law][Act][Code] continue in force as if they were regulations made under this [Law][Act][Code] until such time as they are revoked by the [Regulating Authority].
(3) Subject to subsections (4) of this Article, notwithstanding the repeal of the enactments referred to in subsection (1), any Mineral Right granted under any of those enactments and subsisting immediately before the commencement of this [Law][Act][Code] shall continue in force until expiration by passage of time.
(4) No Mineral Right granted prior to this [Law][Act][Code] shall be extended or renewed but where the prior granted Mineral Right provided a right to apply for a renewal or extension of the right, the holder of that Mineral Right may apply, subject to this [Law][Act][Code], for a similar type of license as provided for under this [Law][Act][Code] on a priority basis.
(5) Any act done, executed or issued under the repealed Law and in force and operative before the commencement of this [Law][Act][Code] shall, so far as it could have been done, executed or issued under this [Law][Act][Code] have effect as if done, executed or issued under this [Law][Act][Code].
(6) Any fund kept under the repealed Law shall be deemed to be part of a fund kept under the corresponding provision of this [Code][Act][Law].
Drawn from Sierra Leone’s mining law (2009), this provision provides for the repeal of the old mining law and some related enactments, but retains in force, regulations made and other actions executed under the repealed laws provided they are not inconsistent with the new law. This is typically the case until new regulations are made to replace existing ones in order not to create a vacuum in administration of the law and ensure continuity.Enactments related to the previous law which are not repealed, are preserved to the extent that they are consistent with the new law. Also typically, transitional provisions preserve the rights of existing mineral rights holders under the repealed law until the expiry of the rights or until they opt for similar rights under the new law. Such conversion applications are to be treated as priority cases.
6. Example 2:
(1) The [Old Mining Law] and all the amendments thereto are hereby repealed, and there is hereby enacted in lieu thereof, a [New Mining Law].
(2) Any regulations made under such repealed or amended laws shall apply only until such a time and to such extent as they are revoked by the [Regulating Authority].
(3) Upon the passage of this [Law][Act][Code] all existing agreements regarding Mineral Rights and related activities pursuant to the periodic review provisions of said agreements shall be subject to review by the [Relevant Authority] within a period of twelve (12) months so as to bring said agreements in compliance with the provisions of this [Law][Act][Code].
Drawn from Liberia’s mining law (2000), this provision repeals the old law in totality. However, to ensure continuity it also requires that a state-designated entity conduct a review of previous mineral rights granted to bring them in conformity with the new law. This is justified under the review clause in existing mining agreements, or under theories of law that defend the right of the State to modify the legal environment of contracts if required for the public interest. When using a provision such as this, it is important to ensure that, if needed, the regulations are updated very quickly following the enactment of the new law. The legal regime is clearer when the new law states the legal status of regulations made under the repealed mining.
This topic is often utilized to bring together all other laws that are implicated by the current law even when they are individually referred to, as applicable, in different sections of the law. This is important because it quickly alerts the law users to other laws that should be read in conjunction with the mining law. Examples of possible applicable laws to be referenced include company law, tax law, investment law, environmental law, labour law, land law and water law. Note that there are jurisdictions where court decisions may have binding effect similar to that of a legislative provision. However, such decisions are usually interpretations of existing law.
7. Example 1:
Unless otherwise specified in the applicable provision of this [Law][Act][Code], this [Law][Act][Code] shall be read and applied in conjunction with the following laws:
[Land Use Law];
This example demonstrates a simple and straightforward identification of other relevant laws. It also allows for thoroughness and clarity on what other laws are applicable to mining companies and any persons that are subject to the mining law. Investors find such references to relevant laws useful.
7. Example 2:
Without limitations upon [the preceding section] and unless specified in the applicable provision of this [Law][Act][Code], all laws or provisions of laws referred to in this [Law][Act][Code], shall constitute an integral part of this [Law][Act][Code] and any violations of such laws or provisions of laws shall be independently deemed a violation of this [Law][Act][Code].
When this language is added to example 1, it seeks to enforce a stricter compliance environment that could result in the multiplication of violations under distinct laws. This language may be seen as good practice for promoting good conduct in the environment, labour, health and safety sectors as well as dis-incentivizing negligent, fraudulent or corrupt practices in the mining sector.
A mining law typically states at the outset (a) whether ownership of mineral resources (i.e. the mineral estate) is separate and distinct from ownership of land (i.e. the surface estate), and (b) who owns the mineral estate. The owner of the mineral resources is the entity, person or institution that has the authority to explore for and exploit those resources, or to grant to others the rights to do so. The mining law must be consistent with the Constitution as to ownership of the mineral resources.
In most cases, the Constitution states who owns the mineral resources. Some Constitutions may make a further distinction between different types of minerals. In such cases, ownership of minerals such as platinum, gold, diamonds, copper, etc. is separate from ownership of the land and is typically vested in the State or Republic or a province of the State, on in the President or the Government in trust for or on behalf of the people. By contrast, ownership of the development minerals may or may not be separate from ownership of the land on which they are located. In the latter case, the landowner may have the right to dispose of such minerals located on or under the land. However, there are cases in which all minerals including development minerals such as clay, sand, limestone, etc., may be deemed vested in the State on behalf of the people, especially if such minerals are discovered in large quantities and are expected to be exploited on a commercial basis.
In cases where the Constitution is silent as to the ownership of the mineral resources, the mining law can establish who owns the minerals if the Constitution recognizes or contemplates that matter as within the realm of legislative authority.
In some Common Law jurisdictions, the Constitution is silent as to the ownership of mineral resources. By tradition and jurisprudence in some such jurisdictions, the landowner is the owner of all mineral resources located on, in or under the land. This is however rare and more so non-existent in Africa.
Where applicable, tribal or customary law may include rules as to the ownership of mineral resources. In such cases, an agreement or consensus with the tribal or customary authorities may need to be reached before modifying such rules in the mining law (e.g., Botswana, South Australia), in order to avoid subsequent conflict.
If the Constitutional provisions on mineral ownership are not compatible with national goals of mineral resource development, it may be necessary to amend the Constitution prior to passing a mining law which may be inconsistent with the Constitution.
Some ownership provisions further obligate the President, Government or Minister, as actors of the State, to ensure that the minerals are developed in a sustainable manner and in the public interest.
8. Example 1:
Ownership of minerals and acquisition of mineral rights.
(1) Subject to the provision of the mining rights in [Tribal Territories Act], all rights of ownership in minerals are vested in the [Country] and the [Regulating Authority] shall ensure, in the public interest, that the mineral resources of the [Country] are investigated and exploited in the most efficient, beneficial and timely manner.
(2) Nothing in this [Act][Code][Law] shall prevent a member of any tribe from taking, subject to such conditions and restrictions as may be prescribed, minerals from any land from which it has been the custom of members of that tribe to take minerals and to the extent that this is permissible under the customary law of that tribe.
Drawn from Botswana’s mining act (1999), this provision vests ownership of minerals in the Republic and mandates the Minister to act in the public interest in the management of the minerals. An exception is however made for tribal mineral rights which are guaranteed under a separate enactment as well as under a provision of the mining act (section 5(2)), which recognizes the right of tribes under customary law to take minerals from their land.
8. Example 2:
Subject to any right conferred under any provision of this [Act][Law][Code], any right in relation to the reconnaissance or prospecting for, and the mining and sale or disposal of, and the exercise of control over, any mineral or group of minerals vests, notwithstanding any right of ownership of any person in relation to any land in, on or under which any such mineral or group of minerals is found, in the State as custodian on behalf of the people of [Country].
Drawn from Namibia’s mining law (1992), this provisions vests ownership of all minerals in the State as custodian on behalf of the people of the country.
Ownership of minerals is deemed to be distinct from ownership of mineral geological information. While mining laws generally allow mining licence holders to collect geological data under the terms of their license, they generally do not explicitly detail who owns the generated geological data. Liberia specifies that when the Minister of Mines authorizes a scientific or geological investigation, all ensuing data will be provided to the Ministry who will keep the data confidential for up to 3 years at the request of the entity who conducted the research. Congo-Brazzaville also specifically obliges exploration license holders to turn over all geological data to the State upon the termination of the license. While these instances can be deemed to infer government ownership of the data, it is not clear. Generally, the discussion of geological data revolves around the obligation of licence holders to maintain geological data records (Namibia, Sierra Leone, Ghana, Zambia, Zimbabwe, Rwanda, Botswana, and Nigeria), the right to obtain data from government agencies (Mozambique, Tanzania) and in some cases the reciprocal responsibility of licence holders to provide geological data to government entities (Ghana). To promote clarity in the law, it is helpful for the mining law to explicitly address the ownership of geological data collected by companies and mineral rights holders given that it is valued and monetizable information. Some laws (petroleum or mining) provide for government ownership of geological data collected by companies but may include rights for companies to use the data in relation to a specific project.
Subject to any right conferred under any provision of this [Act][Law][Code]:
(1) All geological data and its supports belongs to the [State]. The mining rights holder shall submit, every year during the first 90 days of the year, all data generated during its (exploration/exploitation) activity and the required supports (stones, samples, etc.).
(2) The [Regulating Authority] shall issue regulations specifying the format of the information delivered. In any case, such information shall be delivered in technological support and in a format internationally accepted by the mining industry.
(3) Geological information shall remain confidential. Neither the [State] nor the mining rights holder shall share this information with third parties, except when they require technical advice. In such case, the third party shall commit to keep the confidentiality.
(4) The mining rights holder shall take appropriate legal, technical and security measures to prevent its directors, agents and employees to share the information with third parties.
(5) At the issuance of the mining right, the [State] shall provide the mining rights holder all the geological data available referred to the area of the mining right. The mining rights holder may use such information as well as any other information generated during the (exploration/exploitation) phase.
This suggested example vests ownership of geological data in the State and provides for procedures that support ownership of the data by the State, including clear requirements on data transfer to the State. The example also applies strict confidentiality to geological data, only available on a need to know basis for advisers of the State, Mineral Right holders and their related third parties. The issue of level of confidentially applicable to geological data continues to be a debated area and each locality may need to grapple with the issue in the wider context of transparency and its relationship to marketable information.
Prohibited Areas or Protected Zones refers to provisions that prohibit exploration and/or mining activities in certain areas or outline special procedures that apply to certain areas. Often, these provisions safeguard environmentally, culturally or historically significant sites, particular buildings, burial sites, coastal areas, flora, fauna, or other nature reserves. The mining law should either specify those areas or state how such areas are determined and notified to interested parties. For example, some mining laws specify that mineral development activities are prohibited within a certain distance from buildings, cemeteries, railroad tracks, airports, roads, power stations, military facilities or restricted zones, national parks or natural reserves, and certain other sites. Some mining laws provide for such prohibited areas to be specified by an executive or regulatory authority. Since prohibited areas may be designated in the future, the question of whether and how existing operations in areas so designated will be grandfathered or compensated should be addressed in the law.
This could be included as a separate provision of the mining law and titled “decision to open an area for mining activities” or “designation of mining areas”. The provisions under this title should require that a decision to open an area up for mining related activity should be preceded by an analysis conducted by the government of the social, environmental, and economic costs and benefits of mining projects. These assessments are typically known as Strategic Impact Assessments and provide for public consultation to ensure that potentially affected communities are involved in the process for determining mining areas.
It is important that provisions also clearly address whether the prohibition extends to reference exploration as well as mining activities in the designated area. Lastly, to prevent potential disputes, provisions should also highlight where prohibitions exist under other laws that specify prohibited areas, if they exist and ensure consistency with such laws. relevant legislation.
10. Example 1:
(1) (Subject to possible special circumstances) no prospecting or mining work may, be conducted within 80m of:
(a) walled properties, or properties enclosed in a similar manner or by any demarcation which is in common use in the region concerned, any village, collection of dwellings, water sources, religious buildings, burial sites and places considered sacred or forbidden, without the prior written consent from the owner or the authorities for the Provinces concerned, as the case may be;
(b) on either side of transportation routes, watercourses, and generally around any work sites which are beneficial to the public at large including archaeological sites, cultural sites, listed cultural and tourist sites and works of art, without authorisation from the [regulatory authority] after the relevant authorities have given their approval.
(1) Additional protected areas may be declared, by order of [the regulatory authority], to protect buildings and towns, water sources, transportation routes, works of art and work sites which are beneficial to the public at large, at any point where it may be deemed necessary in the general interest, at the request of interested parties and after an investigation has been carried out. Within these areas, prospecting and mining may be subject to certain conditions.
(2) Mining licence holders who can prove loss with regard to their prospecting or operating rights being reduced due to an additional protection area being declared, have the right to compensation, and the value of said compensation shall be the fair value of the rights which were lost. The onus of proving the loss and the value of such loss lies with the holder. Compensation shall be payable by the [the regulatory authority], within six (6) months of a decision in favour of the holder.
In the event that the regulations do not adequately provide for protected areas or sensitive areas, the demarcation of additional safety areas to be added shall be set by sectoral regulations on environmental protection, in accordance with the opinion of [the regulatory authority].
Drawn from Madagascar’s mining law (1999), this provision contains specific rules designating prohibited areas that require the consent of specified authorities before mineral exploration or exploitation activities may take place there. The Code also authorizes the regulating entity responsible for mines to designate additional protected areas, after an investigation, where minerals exploration and mining may be subjected to certain conditions. Article 106 provides for the indemnification of miners whose rights are impaired by such designations.Finally, the Code assumes that the environmental legislation makes certain protected areas off limits to mining; and authorizes the creation of buffer zones around such areas in environmental regulations for the mining sector, subject to prior advice of the regulating entity.
10. Example 2:
Article [_] Restrictions on exercise of rights by holders of mineral licences
(1) The holder of a mineral licence shall not exercise any rights conferred upon such holder by this [Act][Code][Law] or under any terms and conditions of such mineral licence:
(a) in, on or under any private land until such time as such holder-
(i) has entered into an agreement in writing with the owner of such land containing terms and conditions relating to the payment of compensation, or the owner of such land has in writing waived any right to such compensation and has submitted a copy of such agreement or waiver to the [Regulating Authority]; or
(ii) has been granted an ancillary right as provided in [relevant section] to exercise such rights on such land;
(b) in, on or under any-
(i) town or village;
(ii) land comprising a proclaimed road, including such parts adjoining such road as may in terms of any law governing such road be regarded as the road reserve, aerodrome, harbour, railway or cemetery; or
(iii) land used or reserved for any governmental or public purpose, and otherwise in conflict with any law, if any, in terms of which such town, village, road, aerodrome, harbour, railway, cemetery or land has been established, erected, constructed or is otherwise regulated, without the prior permission of the [Regulating Authority] granted, upon an application to the [Regulating Authority] in such form as may be determined in writing by the [Regulating Authority], by notice in writing and subject to such conditions as may be specified in such notice;
(c) in, on or under any land in respect of which no person other than the holder of a reconnaissance licence is, by virtue of a notice issued in terms of [relevant section] entitled to carry on any prospecting operations or mining operations;
(d) in, on or under any private or State land-
(i) used as a garden, orchard, vineyard, nursery, plantation or which is otherwise under cultivation;
(ii) within a horizontal distance of  meters of any spring, well, borehole, reservoir, dam, dipping-tank, waterworks, perennial stream or pan, artificially constructed watercourse, kraal, building or any structure of whatever nature;
(iii) within a horizontal distance of 300 meters from any point on the nearest boundary of any land, as defined in [Relevant Related Legislation] if such land has been surveyed for the purpose of inclusion in a township as defined in that section; or
(iv) on which accessory works were erected or constructed under this Act and which existed at the time of the issue of the mineral licence in question, without the prior permission in writing of the owner of such land, and, in the case of land referred to in subparagraph (iv), of the holder of a mineral licence who has erected or constructed such accessory works on which it is proposed to exercise such right;
(e) in, on or under any land subject to a production licence, as defined in [relevant section] of the [Petroleum Legislation], which existed at the time of the issue of the licence in question, without the prior permission in writing of the holder of the production licence concerned; and
(f) which in any way will interfere with fishing or marine navigation, without prior permission of the [Regulating Authority] granted, upon an application to the [Regulating Authority] in such form as may be determined in writing by the [Regulating Authority], by notice in writing and subject to such conditions as may be specified in such notice.
Drawn from Namibia’s mining law (1992), this language is protective of the typical public places such as roads, railways, ports, aerodromes, cemeteries, townships, water bodies, etc. It does not specifically refer to national parks or nature reserves as off limits to mining, but it includes, less typically, land which is being cultivated or used as a garden, orchard, vineyard, nursery or plantation and land under a petroleum exploration or production. Rights are also restricted on private lands unless the landowner agrees in writing that compensation and other terms have been satisfied or waived. In contrast, other mining laws authorize entry onto private lands but subject to negotiation and payment of compensation to the landowner.
A mining law, due to public interest or other reason, may allow an individual, a university, or a research institute to study the geological structure and mineral resources of a defined area as long as no deposits are used for financial gain. Research/non-commercial activities typically are not treated as a separate form of license, but may require authorization from the regulating body or government official who oversees the country’s mining sector. If not provided elsewhere in the national legislation, the responsibility for or the creation of a government agency or department for collection and management of geological data should be included.
It is desirable to provide in the mining law terms for non-commercial geological and related research activities by the national geological service or department, domestic and foreign universities and/or technical schools, often in collaboration with bilateral, regional or international institutions, for the purposes of increasing knowledge of and data on the country’s geology, seismology, hydrology, etc. The issues to be addressed in this regard include:
- Establishing the authority to reserve or assign areas for such purposes;
- The procedures for reserving areas for such purposes;
- The terms and conditions for maintaining such reserves or assignments and for their eventual release; and
- Whether and under what conditions non-commercial research may be conducted within areas subject to prospecting, exploration or mining licences.
11. Example 1:
The prospecting and reconnaissance activities as well as the discovery or retrieval of fossils, for scientific purposes, from the second-order fossiliferous beds referred to in [the relevant article] of the present [Code] [Act] [Law], shall be carried out in accordance with the relevant permit issued in accordance with the provisions of the present [Code] [Act] [Law].
Authorisation to remove fossils, for scientific purposes, from second-order fossiliferous beds, shall be granted, on an individual basis, to scientific organisations which may appoint natural persons as their representatives.
The Government may declare that certain areas are restricted and reconnaissance, prospecting and archaeology are prohibited for the reasons, and following the procedures, set out in the present chapter and may be, subject either to the availability of the relevant area, or to written agreement from the rights holder for the area. Areas may be declared temporarily restricted in the cases provided for in Articles [_] below.
(1) For geological studies, [the regulatory authority] may, on request from the department in charge of geological studies, issue an order declaring that the area relating to the studies is reserved, subject to the reservations provided for in [the relevant article] above.
(2) Said declaration must include: an identification square meters and cadastral markers which constitute the reserved area; details of the programme for the studies to be carried out inside the reserved area, and the period of time required for said studies.
(3) The initial period of the area reservation may not exceed eighteen (18) months, which may be extended only once, for a maximum period of six (6) months.
(4) The report on the geological studies carried out must be provided to [the regulatory authority] to be published and made available to the public, at least fifteen (15) days before the reservation of the area lapses.
(1) Where it has been found that the reasons for which an area was classified as reserved are no longer valid, the relevant authorities may at any time issue a decree cancelling the reservation.
(2) Areas which are released once work, studies or training have been completed shall be returned to the initial rights holders of the formerly reserved areas.
(1) Where second-order fossil beds containing rare species are found in various geological strata, such fossil beds may be the subject of permits for scientific studies and sampling.
(2) Once the studies have been completed, the permit holders are required to send technical reports on the work carried out to the Authority which granted the permit.
Drawn from Madagascar’s mining codes (1999 and 2005), these provisions address non-commercial research in the following detail:
- A special authorization for the extraction of a certain class of fossils by scientific organizations;
- Government authority to reserve certain areas for specified purposes, including areas subject to mining licence provided that the holder gives written consent.
- Authority of the regulating entity to reserve areas for up to 18 months (extendable for an additional 6 months) for geological studies.
- The release of the reserved areas once the reservation is no longer justified.
11. Example 2:
Notwithstanding the provisions of this Act, the [Regulating Authority] may, in the public interest and subject to such conditions as he may determine, authorize any person to undertake non-commercial investigations into the geological resources of [Country].
Drawn from Botswana’s mining law (1999), this provision in contrast with Example 1 contains a general mandate for the regulating entity to authorize “any person” to conduct non-commercial geological research. As the law does not provide any further detail this provides for broad discretion on the part of the regulating entity which may lead to inconsistent use of the authority or at worst, imposition of inappropriate terms and conditions.
There is growing international consensus on the importance of transparency in promoting good governance of the mining sector and the efficient management of natural resource revenues. The fundamental idea behind transparency is that the more information the public has about the sector in terms of the legal framework, the mining activities and the revenues such activities generate, the more the public can hold governments and companies accountable for their respective actions related to the sector. From another perspective, transparency also plays an important role in ensuring fair and non-arbitrary processes by the sector regulating authorities ensures a level playing field which in turn instils, which is essential to instil confidence among investors. In other words, in that a level playing field exists. In broad terms, transparency is necessary for accountability, which in turn is necessary for good governance of the sector. Narrowly defined however, transparency provisions focus on information to be disclosed in a relevant, widely accessible, timely and accurate manner, and where possible, in open data format.
Transparency provisions in mining laws may explicitly list the categories of information and various documents that will be made available to the public; or may broadly provide for adherence to global transparency norms and standards such as the Extractive Industries Transparency Initiative (EITI), which requires implementing countries to annually disclose information on tax payments, licenses, contracts, beneficial ownership, production and other key elements around resource extraction (some countries such as the Central African Republic and Liberia have separate legislation implementing the EITI standard).
Transparency is a cross-cutting topic, relevant for all segments of the EI value chain. It is essential for a mining law to provide for robust transparency provisions in the context of (a) the decision to extract; (b) competitive procedures for issuing licenses and allocating mineral exploration or production rights; (c) deciding the mandate of the institutions to regulate and monitor the operations; (d) the status of non-payment obligations surrounding mining activities (e.g., health and safety, environment, and local content; (e) the fiscal regime, reporting of payments and collection of taxes, and publication of deals; (f) revenue management.
A mining law should also provide for disclosures related to information required to assist communities and other stakeholders in monitoring companies’ environmental and social obligations so as to supplement its own monitoring capacity through public engagement (a democratic approach to monitoring activities). Document where such information may be explicitly required include bidding materials and bid evaluation reports, mineral development agreements, environmental and social impact assessments and management plans, local content plans and community development agreements.
Confidentiality provisions may provide for limits on transparency, for example, to protect company commercially sensitive information. It is important, however, that these limitations are used on an exceptional basis, only where there is a valid justification for sensitivity. When allowed, confidentiality should be provided for a period of years with respect to geological, engineering, and other process related information acquired by mineral right holders in the course of exploration, development or exploitation. However, even in this case, exceptions to exception are necessary in order to permit the publication of statistics in the aggregate and to safeguard against potential frauds on the market by mineral right holders.
While some companies have resisted contract transparency on the grounds of commercial sensitivity, executives of some leading mining companies have spoken out in favour of contract disclosure principle. The International Council on Minerals and Metals, whose members are 17 of the largest global mining companies, requires that its members engage constructively in appropriate forums to improve the transparency of contractual provisions on a level-playing field basis.
The mining industry, civil society and mining administration staff favour provisions that require transparency in the application of mining law, as a safeguard against manipulation, corruption and abuse of discretion. Terms that promote transparency in the application of the mining law include:
- Public access to current information as to the availability of areas for mineral rights, the existence of mineral rights and pending applications for mineral rights and transactions, and the status of processing of applications for mineral rights and transactions;
- Objective, nondiscretionary criteria as to eligibility and conditions for the grant of mineral rights;
- Objective, nondiscretionary procedures for the submission and processing of applications for mineral rights and transactions;
- Clear, objective criteria for maintaining the validity of mineral rights;
- Clear, objective grounds for the denial of mineral rights or transactions and the cancellation or extinction of mineral rights, together with procedures requiring notice and publication of a written statement of the grounds for the decision, and an appropriate opportunity for challenge of the decision or cure of the failure;
- Clear, objective grounds for the imposition of sanctions and penalties, together with procedures requiring notice and publication of a written statement of the grounds for the sanctions or penalties, together with an appropriate opportunity for challenge of the decision or cure of the infraction;
- Clear, updated information on the ‘beneficial ownership’ of the companies that have obtained rights to extract minerals;
- Clear reporting requirements on mining activities, such as reports on exploited minerals quantity and mineral valuation, accident reports and other relevant information including audit reports.
- Clear annual reporting requirements on local development obligations.
- In contract regimes, the use of standard model agreements as the basis for limited negotiation of terms, subject to an objective review and approval procedure prior to signature, and published on the Mining Administration’s website. Ultimately, applying the rule of contracts, mineral development agreements negotiated under the mining law should be consistent with the provisions of the mining law.
- Clear publication requirements for payments made to governments and allowances provided to companies.
12.1 Example 1:
(1) All companies applying or bidding for a license are required to provide accurate information on their Beneficial Ownership as part of their application or bid documents and throughout the duration of a license, license holders will inform the [Regulating Authority] of any changes to this information, within one month of the change occurring.
(2) The [Regulating Authority] will promptly publish and maintain all Beneficial Ownership information in a publicly accessible format on its website.
(3) Failure to provide the information required in subsection (1) above, in good faith and in conformity with the regulations to this [Law][Act][Code] shall invalidate a license application, and be grounds for revocation where a license has been granted.
(4) For the purposes of this Article [_] (Beneficial Ownership), “Beneficial Ownership” means the control, possession, custody or enjoyment by any natural person, directly or indirectly, of a reasonably significant economic interest in a given legal entity or receives significant economic benefit from such a legal entity, even where formal ownership (title) may be in the name of another person or entity. In addition to any other qualifying criteria, a person is automatically considered to be a beneficial owner if such person owns 5% or more of the legal entity in question.
Drawn from Ivory Coast’s mining code (2014), this provision focuses on EITI requirements and requires compliance with the EITI standards and procedures by both mining companies and public authorities. While the provision best serves the legal frameworks of EITI member states, non EITI member states may still use a similar provision by referring to the EITI principles and standards as the objective yardstick for evaluating obligations (South Sudan).
12.1 Example 2:
(1) All information and contracts required, submitted or signed under this [Law][Act][Code] shall be considered non-confidential. Confidentiality clauses or other clauses in a mining contract that prevent disclosure of information shall be void.
(2) The information shall be made available to the public in a timely, widely accessible and accurate manner, including on a public website or newspaper of wide circulation.
(3) Subject to Section (1) above, if any information is deemed sensitive on the basis of national interest or commercial purposes, a request may be made for confidentiality on an exceptional basis and the Minister shall determine the scope of such exception and provide a duration after which such information will be made available to the general public.
This suggested provision establishes an expansive approach to transparency, requiring non-confidentiality in all information, data and reports related to the mining activity. Emphasis is placed on the quality of the information, namely, that it should be updated and widely accessible to the public. In cases where confidentiality is deemed necessary, the motivation behind should be clear, justified and limited in time.
The momentum for enacting beneficial ownership legislation is gathering pace around the world, with a growing number of countries adopting principles on disclosure of beneficial ownership. The objective of such initiatives is to shed light on secret ownership structures that enables some extractive companies to evade tax payments or hide inappropriate relationships with relevant public officials. Mineral development benefits depend to a great extent on effective tax collection and extractives companies can evade by using complex ownership structures. While a complex and opaque ownership structure does not automatically mean that an extractives company is engaging in wrongdoing, the disclosure of beneficial ownership information helps to deter improper practices or facilitates their detection.
A mining law should define the meaning of “beneficial ownership” in detail, or include explicit reference to the definition provided in related laws. Defining the concept to cover all cases is challenging, but in most cases “beneficial ownership” means ownership which is enjoyed by any natural person who, directly or indirectly, has any significant control or economic interest in a given legal entity or receives significant economic benefit from such a legal entity, even where formal ownership (title) may be in the name of another entity. Preferably, each country’s choice of definition would be based on a clear understanding of what problems it most wants to address through the disclosure of beneficial ownership information, how companies operating in the country tend to structure their ownership, and whom the country anticipates to use the information.
Under the 2016 EITI standard, countries are required to adopt legislation that prompts the disclosure of beneficial ownership of entities that bid for, operate or invest in extractive assets. Such disclosure should include the identity of the owner, i.e. the name, nationality and country of residence; best practices indicate that the information should be made available through public registers.
With regards to a specific threshold of ownership at which beneficial owners must be declared, a ceiling of five percent or lower is recommended by international best practice. It is critical that countries pick thresholds with care, given that for large extractive projects even a 1 or 5 percent interest can generate substantial rents. Finally, legislation should provide for penalty for false, incomplete or misleading disclosures, such as revoking a company’s license or contract, or barring it from competing for contracts.
12.2 Example 1:
(1) All companies applying or bidding for a license are required to provide accurate information on their Beneficial Ownership as part of their application or bid documents and throughout the duration of a license, license holders will inform the [Regulating Authority] of any changes to this information, within one month of the change occurring.
(2) The [Regulating Authority] will promptly publish and maintain all Beneficial Ownership information in a publicly accessible format on its website.
(3) Failure to provide the information required in subsection (1) above, in good faith and in conformity with the regulations to this [Law][Act][Code] shall invalidate a license application, and be grounds for revocation where a license has been granted.
(4) For the purposes of this Article [_] (Beneficial Ownership), “Beneficial Ownership” means the control, possession, custody or enjoyment by any natural person, directly or indirectly, of a reasonably significant economic interest in a given legal entity or receives significant economic benefit from such a legal entity, even where formal ownership (title) may be in the name of another person or entity. In addition to any other qualifying criteria, a person is automatically considered to be a beneficial owner if such person owns 5% or more of the legal entity in question.
This suggested example requires that companies provide beneficial ownership information to the State and inform the regulating authority of any changes to beneficial ownership structures throughout the duration of a license, for purpose of maintaining current and accurate information. It obligates the regulating authority to make such information public. It also sanctions the lack of compliance by extractives companies for failure to provide relevant information.
The example also provides a definition of the “beneficial ownership”, setting the threshold of ownership at 5%, the minimum required by international best practice. It is recommended that the definition of beneficial ownership, while useful at the site of the applicable provision, is best defined in the Definitions section of the mining law in order to allow for the definition to apply to the term no matter the site of occurrence in the law.
12.2 Example 2:
(1) All companies applying or bidding for a license are required to provide accurate information on their Beneficial Ownership as part of their application or bid documents and throughout the duration of a Mineral Right and all Mineral Rights holders will inform the [Regulating Authority] of any changes to this information, within one month of the change occurring.
(2) The [Regulating Authority] will promptly publish and maintain all Beneficial Ownership information in a publicly accessible format on its website.
(3) Failure to provide the information required in subsection (1) above, in good faith and in conformity with the regulations to this [Law][Act][Code] shall invalidate a mining right application, and be grounds for revocation where a mining right has been granted.
(4) The holder of a mining right shall provide to the [Regulating Authority] a trimestral report on the beneficial ownership of subcontractors hired for a value higher than [Minimum Contract Amount Allowed].
(5) For the purposes of this Article [_] (Beneficial Ownership), “Beneficial Ownership” means the control, possession, custody or enjoyment by any natural person, directly or indirectly, of a reasonably significant economic interest in a given legal entity or receives significant economic benefit from such a legal entity, even where formal ownership (title) may be in the name of another person or entity. In addition to any other qualifying criteria, a person is automatically considered to be a beneficial owner if such person owns 5% or more of the legal entity in question.
While the first subsection is similar to the first example, this example goes further with the disclosure requirements, by soliciting the disclosure of beneficial ownership of subcontractors of the mineral rights holder.
Anti-bribery/Anti-corruption/conflict of interest often refer to provisions that prohibit license holders and government officials from engaging in fraud and corruption as it applies specifically to all activities related to mining operations. The inclusion of anti-bribery and anti-corruption provisions in mining laws, focusing on both the demand side (officials) and the supply side (companies or individual intermediaries), is a recent innovation that reflects a strong commitment to deter corruption in the administration of the sector. These provisions may also lay out processes that further discourage both license holders and government officials from engaging in corrupt and fraudulent activities such as language prohibiting government officials from individually owning a stake in mining operations. To the extent that economic penalties and sanctions are provided for in the mining code the sanctions should be meaningful for deterrence.
Although anti-corruption and anti-bribery provisions usually belong to the realm of criminal law, international best practice promotes the reinforcement of such prohibitions in mining laws, given high corruption risks in the sector. To the extent that economic penalties and other sanctions are provided for in the mining code, these should be meaningful for deterrence.
The inclusion of anti-bribery and anti-corruption provisions in mining laws is a recent innovation that reflects a strong commitment to deter corruption in the administration of the law. The more traditional provisions (see Example 3) focus on conflict of interest. This subject may be sufficiently treated in general laws sanctioning bribery and corruption and not necessitate specific sectoral measures in the mining law.
13. Example 1:
(1) It is a prosecutable offence for any company which is active in the mining sector or has any interest in it, including any director, shareholder, employee, representative or subcontractor of such a company to make offers or promises, or offer donations, gifts or benefits of any kind whatsoever:
(a) a government official or an elected representative so as to influence a decision or an action taken as part of the carrying out of their public functions, including those which relate to the mining sector;
(b) any other individual, association, company, natural person or legal entity so as to use their imputed or actual influence over any action or decision by any government official or an elected representative as part of the carrying out of their public function, including those which relate to the mining sector.
Should a mining rights holder or one of their officials, directors, employees, representatives, subcontractors or shareholders, duly acting in the name of said mining right holder, violate the provisions of the present [Code][Act][Law] relating to the prohibition of corrupt activities, this may lead to penalties including, without limitation, revoking the relevant mining right. The penalty shall be applied once there has been an investigation into the severity of the offence, the time which has lapsed since the offence was committed, the actions implemented by the rights holder in order to report the offence and inform the government, the level of investment which the rights holder has already expended to develop the project.
It is a prosecutable offence for any civil servant in the judiciary or administration, or any other representative of the Civil Service of [Country], or any elected representative responsible for deciding on an administrative action in the mining sector to solicit or accept offers, promises, donations, gifts or benefits of any kind whatsoever, to perform, refrain from performing, or to abuse their influence in the carrying out of their functions, in particular in the context of allocating mining rights, overseeing activities and payments, and approving applications, or decisions relating to the extension, subleasing, assignment, transfer or cancellation of a mining right.
Drawn from Guinea’s mining law (2011), this provision seeks to establish a balanced framework for dealing with bribery and corruption. Supply side measures include prohibition of mining companies from inducement of public officials in relation to decisions on mineral rights, requirement of mineral right holders to sign a code of conduct to respect anti-bribery laws, to submit to anti-bribery investigations where necessary, and to uphold the EITI principles. Additionally, mineral right holders must prepare and submit an anti-corruption monitoring plan to be published annually setting out among other things the holder’s compliance with anti-corruption provisions, control measures instituted to prevent corruption and how bribery allegations have been dealt with. Demand side measures include prohibition against solicitation and acceptance of bribes by public officials in relation to any decision making concerning mineral rights.
13. Example 2:
(1) No public officer shall directly or indirectly, acquire any right or interest in any mineral right and any document or transaction purporting to confer any right or interest in any such officer shall be null and void.
(2) Subject to subsection (3), no public officer shall own or retain any shares in a company carrying on reconnaissance, exploration or mining operations, or the import, export or marketing of minerals in the country.
(3) Where an officer is at the assumption of the functions of his office, the holder of shares in such company as is mentioned in subsection (2), the officer shall divest himself from such right or interest or dispose of the shares within ninety calendar days after assumption of office.
(4) An officer who contravenes this section commits an offence and shall be liable on conviction to a fine not less than [insert appropriate amount that would be sufficient for deterrence] United States Dollars or its equivalent in [national currency] or to a term of imprisonment not exceeding twelve months or to both such fine and imprisonment.
(5) For the purposes of this section, “officer” means a public officer for the time being engaged in the administration of this [Act][Code][Law].
Adapted from Sierra Leone’s mining law (2009), this provision, in contrast with Example 1, is focused on conflict of interest and abuse of office situations. It requires public officials responsible for administering the mining law not to hold any interest in any mineral operations. This provision will affect persons who own a direct interest in mineral operations.
License holders are often required under mining laws to secure the people and goods within and around mining sites, which may be provided by private security, local police forces, national/army police forces or a combination of all three. Historically, the securing of mine sites has sometimes led to human rights abuses and other violations of the law in Africa, which have interrupted site production, endangered workers and local community residents, and in the extreme, generated civil conflict. There are also assessments on the correlation between poor regulation of private security forces and the increase in illegal arms trafficking further contributing to perennial conflict in resource rich countries.
While security is necessary to ensure the safety of people, goods and other features of mine sites, it is critical that the use of security is governed by a detailed legislative framework and is carefully monitored by relevant agencies within a State government. Over 20 African countries have legislation addressing the use and management of private security. At minimum a mining law should make reference to existing, topic-specific legislation as well as additional related legislation.
Overall, provisions addressing the use of security should seek to address the following points either in the mining law and/or in comprehensive related legislation:
- Process for approval as a private security firms
- Process of continuous evaluation for approved firms
- A code of conduct for all security forces including duties compliant with international law (for example prohibitions against sexual exploitation, child labour, inhuman or degrading treatment etc.)
- Regulations regarding the use of force, the scope, purchase, possession, storage and use of firearms/discharge of weapons and apprehension and detention of persons
- Clearly elaborated grievance procedures
- Requirement of incorporation of the code of conduct into company policies
- Requirement for training (initial and continuous) for all security forces
- Requirement for clear demarcation of the secured area around the mining site
- The setting of a reasonable perimeter in which security forces may operate outside the mining site by the government in collaboration with the company
- In surrounding communities, publication/advertisement of the agreed upon security perimeter
- Visible demarcation of area to be covered by security forces
- Notification to all security forces, prior to the commencement of activity, of the limits of the secured perimeter
In addition to the above issues, where private security legislation does not address security of mining sites specifically, provisions in the mining law may note in particular:
In most countries, several regulating authorities will govern the use of force (the ministries dealing with natural resources, private sector/industry, police, army etc.). It is therefore essential that these provisions mention relevant entities by name and highlight the need for collaboration and agreement across the entities, reinforcing effective management of security forces. Finally, provisions should also be in harmony with international best practice, in particular the International Code of Conduct for Private Security Service Providers (ICoC), the Voluntary Principles on Security and Human Rights, as well as general principles of human rights under international law.
14. Example 1:
Article [_] The Use of Security Forces
The employment, management and use of security forces within and around mining sites, for all mining licenses under this [Act][Code][Law], are regulated by the following provisions and [relevant related legislation].
Article [_] Area Secured for Mining Operations
(1) The [Regulating Authorities] may, at the request of a license holder and by notice in national newspapers, establish a controlled area for any reasonable perimeter which is subject to mining operations.
(2) The [Regulating Authorities] may, by notice published in national newspapers, amend or cancel any area declared to be a controlled area or any notice declaring to do so under Article [_].
Article [_] : Modalities of Controlled Areas
A joint agreement between the [Regulating Authorities] will define the terms of movement of people, goods and security forces within the controlled area.
Inspired by Tanzania’s mining act (2010) and Mali’s mining code (2012), this example references relevant legislation but also provides broader regulatory provisions which mainly addresses transparent establishment, amendment or cancellation of areas controlled by such security forces so as to give notice of their existence to the public. It also requires a streamlining of oversight by the relevant regulating entities.
14. Example 2:
Article [_] People and assets control bodies
(1) Security and control of people and assets in restricted zones and protection zones, as well as the security of the respective deposits and mining production activity, are carried out by the respective mining rights title holders, using their own means and personnel contracted by the same, in a self-defence system, or by means of contracting specialized security companies, within the terms permitted by the law.
(2) Security and control of people and assets in the areas demarcated for handicraft production are carried out by the State. Whenever the areas are included in the proximity of industrial production zones, security shall be carried out in co-operation with the respective mining rights title holders.
(3) The people and assets security and control powers assigned to the entities mentioned in the previous numbers do not prejudice the generic competency attributed by law to the National Police and security bodies.
Article [_] Duties of the mining rights title holders regarding security
(1) In the exercise of the surveillance, security, and people and assets circulation control duties assigned to them by this Code, the mining rights title holders and security companies must:
a) keep under constant surveillance all zones under their control and monitor the movement of people and assets;
b) prevent unauthorised residence, movement, exercise of economic activities and access by people within the mining activity areas;
c) prevent the performance of any and all unauthorised mineral prospecting, search, recognisance and exploration activities;
d) ensure the protection of deposits and events, opposing any and all activities that infringe their security;
e) ensure the security of people, facilities, assets and services associated with the exercise of mining activities.
2) In the performance of their duties, the entities and persons in charge of security and the control of people and assets movements may carry out the following acts:
a) identify and perform routine searches of the workers and, in a general manner, all people that enter or exit the restricted areas or circulate or are present in further areas under their control, as well as the objects and goods which they carry or are under their responsibility;
b) demand the presentation of access permits, credentials or goods or assets waybills, whenever access to the area legally requires those authorisations;
c) preventively hold the perpetrators of crimes as prescribed in the present Code, whenever caught committing an offence, and immediately deliver them to the competent police authorities, and apprehend the crime instruments carried by them.
3) For the purposes of the provisions of paragraph c) of the previous number, any means of transport, weapons and materials and camping accessories found in the possession of the perpetrators are deemed to constitute crime instruments.
4) Any persons held and the goods apprehended must be immediately delivered to the magistrate of the Public Ministry or the National Police station situated nearest to the detention or apprehension site, in terms of the law.
5) The mining rights title holders must publish internal regulations regarding surveillance, security and control, applicable to the restricted zones, aimed at their workers and all persons authorised by the law or invited to enter those zones.
6) The regulations mentioned in the previous number must be previously submitted to the competent ministry who, following favourable opinion, will submit them for approval by the National Police.
Article [_] Responsibilities of the bodies
The provisions of the previous article do not prejudice the exercise of the duties which, regarding surveillance, security, and control of persons and assets, are assigned to the public security bodies and private security specialist companies in the restricted zones, protection zones and areas demarcated for handicraft exploration, within the terms of the present Code.
Article [_] Prohibition of prosecution
The mining rights title holders or private security agents mentioned in the previous articles may not carry out criminal prosecution proceedings.
Article [_] Obligation to co-operate with authorities
The personnel from the concession companies or private security specialist companies in charge of the control of persons and assets within the strategic minerals production areas must, in the prevention of, and fight against, illegal trafficking of strategic minerals and further illegal activities as prescribed in the present Code, act in close co-operation with the police, prosecution and judiciary authorities.
Article [_] Further considerations
All further provisions regarding licensing and use of security forces may be found in [related legislation].
Adapted from Angola’s mining code (2011), this provision addresses the use of security forces in more detail in two key areas: the scope of activities permitted as part of securing mining sites; and the relationship between the licence holder, private security companies, and relevant government agencies.
Some of the key distinctive features of the provision include:
- The right of the State to demarcate restricted zones for goods and persons around artisanal mining sites.
- The right of the State, in collaboration with the licence holder, to demarcate security zones where zones are near industrial production areas.
- The powers given to security forces do not prejudice the competency of the national police and/or other state security agencies with the responsibility for managing national security.
- The scope of activities licence holders/private security firms may engage in under the context of securing persons and goods around the mining site (for example defining what weapons, materials and other paraphernalia can be considered “instruments of a crime” and which security forces may legally confiscate).
- The duty of licence holders/private security firms to immediately hand over detained persons and goods to the national police and/or the public prosecutor.
- The duty of licence holders to publish internal regulations governing surveillance and safety protocol for employees and any other persons authorized to secure restricted areas.
- The barring of licence holders/private security firms from conducting criminal investigations.
- The requirement of licence holders/private security firms to collaborate with the police, public prosecutor and judiciary, particularly in combating illegal trafficking of minerals.
Finally, this provision addresses issues of registration, evaluation, training and code of conduct for security forces by referencing the related legislation, in this case Angola’s Law on Private Security Companies (1992).
In most jurisdictions, the mining law is not fully self-executing and requires the adoption and publication of implementing regulations. In cases where the law establishes principles to be fleshed out in the regulations, the latter may be quite extensive. In cases where the law itself is very detailed and largely self-executing, the scope of the implementing regulations may be limited to establishing forms for applications, reports, etc.
The Constitution may specify which matters can be established by regulation and which matters must be established by law. For example, usually taxes must be established by law rather than by regulation. Such restrictions must be respected.
As a general matter, it is desirable to set by regulation rules that may need to be changed in the foreseeable future, so that it is not necessary to seek an amendment of the law itself for that purpose. Laws that delegate extensive authority to the executive to establish the rules for mineral rights by regulation are often indicative of a lack of stability of the law. Mining investors have a strong preference for stable laws because of the long gestation period before mining investments become profitable, and the immobility of the assets. Furthermore, monitoring of the mining activities requires a stable regime as it takes time for the law to be comprehensively understood by the impacted communities and other stakeholders.
If regulations to implement the law will be necessary (as is the usual case), then the law should so state and authorize the executive power to enact those regulations, while limiting their scope. Regulations cannot legally contradict the provisions of the law or regulate matters outside the scope of the authority delegated in the law.
Ideally, regulations should be passed together with the law to ensure effective implementation of the law. Otherwise, a reasonable timeframe may be provided for issuing regulations to prevent significant delays that could affect effective implementation of the law.
15. Example 1:
Related matters which are not expressly provided for, defined or regulated by the provisions of the present [Code][Act][Law] shall be deemed to fall under the Mining Regulations.
Drawn from DRC’s mining law (2002), this provision provides the scope of the regulation. The provision sets the scope of the regulation by stating in numerous articles of the law what additional details are to be established by regulation. The mining code of DRC defines the mining regulation as the group of measures for the execution of the provisions of the mining code, established by decree of the President of the Republic.
15. Example 2:
(1) The [Regulating Authority] may, by notice in the [Gazette], make regulations regarding –
(i) the conservation of the environment at or in the vicinity of any mine or works;
(ii) the management of the impact of any mining operations on the environment at or in the vicinity of any mine or works;
(iii) the rehabilitation of disturbances of the surface of land where such disturbances are connected to prospecting or mining operations;
(iv) the prevention, control and combating of pollution of the air, land, sea or other water, including ground water, where such pollution is connected to prospecting or mining operations;
(v) pecuniary provision by the holder of any right, permit or permission for the carrying out of an environmental management programme;
(vi) the establishment of accounts in connection with the carrying out of an environmental management programme and the control of such accounts by the [Regulating Authority];
(vii) the assumption by the State of responsibility or co-responsibility for obligations originating from regulations made under subparagraphs (i), (ii), (iii) and (iv) of this paragraph; and
(viii) the monitoring and auditing of environmental management programs;
(b) the exploitation, processing, utilization or use of or the disposal of any mineral;
(c) procedures in respect of appeals lodged under this [Act][Code][Law];
(d) fees payable in relation to any right, permit or permission issued or granted in terms of this [Act][Code][Law];
(e) fees payable in relation to any appeal contemplated in this [Act][Code][Law];
(f) the form of any application which may or have to be done in terms of this Act and of any consent or document required to be submitted with such application, and the information or details which must accompany any such application;
(g) the form, conditions, issuing, renewal, abandonment, suspension or cancellation of any environmental management programme, permit, licence, certificate, permission, receipt or other document which may or have to be issued, granted, approved, required or renewed in terms of this [Act][Code][Law];
(h) the form of any register, record, notice, sketch plan or information which may or shall be kept, given, published or submitted in terms of or for the purposes of this [Act][Code][Law];
(i) the prohibition on the disposal of any mineral or the use thereof for any specified purpose or in any specified manner or for any other purpose or in any other manner than a specified purpose or manner;
(j) the restriction or regulation in respect of the disposal or use of any mineral in general;
(k) any matter which may or must be prescribed for in terms of this [Act][Code][Law]; and
(l) any other matter the regulation of which may be necessary or expedient in order to achieve the objects of this [Act][Code][Law].
(2) No regulation relating to State revenue or expenditure may be made by the [Regulating Authority] except with the concurrence of the [Finance Regulating Authority].
(3) Any regulation made under this section may provide that any person contravening such regulation or failing to comply therewith, is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding [six] months
Drawn from South Africa’s mining law (2002), this example specifies the scope of regulations that the regulating authority is authorized to adopt. Significant aspects of this authorizing provision include:
- The authority to make regulations is delegated to the regulating entity – not to the Government as a whole, the Prime Minister or the President, which assures the predominance of sectoral considerations;
- The primary focus of the regulations is to be environmental protection;
- General catchall provisions in subsections (k) and (l) expand the authority of the regulating entity considerably; and
- Any regulation relating to State revenues or expenses requires the concurrence of the finance regulating authority.
Provisions which address what government agencies will issue licences, manage the license application process, provide oversight of issued licenses, and ensure license holders exploit minerals in ways that are consistent with a country’s laws, oversee the utilization of the mineral development-generated resources and other benefits or conduct research and manage knowledge and information on the sector are collectively referred to as ‘regulating bodies’ provisions. Mining codes may spell out the composition, function, and responsibility of each relevant bodies, including how they coordinate with one another to manage a country’s mining sector. The respective authority at the national, provincial and local bodies should also be made clear.
Also important to consider is provisions that allow for inter-ministerial or inter-agency coordination by all the bodies implicated in management of the sector to avoid inconsistencies, information silos and conflicts among the government bodies and agencies.
A key trend/consideration is separation of regulatory scope, i.e. those that grant the rights, those that monitor or enforce the obligations attached to licenses or rights granted, and those responsible for collection of revenues. The role of state-owned entities should be clearly defined. Good practice dictates against blending of regulatory, enforcement and commercial responsibilities in one entity to avoid any conflict of interest that may result. Good practice would be to restrict the role of state-owned companies to commercial responsibilities.
16. Example 1:
Chapter II of the First Title of the [Code][Act][Law] sets forth the respective authority of the regulating bodies in articles [_], covering the following:
Article 8: Of the Role of the State and its organs
Article 9: Of the President of the Republic
Article 10: Of the [Regulating Authority]
Article 11: Of the Provincial Governor and the Provincial Division Chief of Mines
Article 12: Of the Mining Cadastre
Article 13: Of the Directorate of Geology
Article 14: Of the Directorate of Mines
Article 15: Of the Service Responsible for Protection of the Mining Environment
Article 16: Of the Restriction of Authority
Drawn from DRC’s mining law (2002), this provision sets forth the respective duties of the regulatory authorities in 8 articles and then states in Article 16 that no other public or state institution has authority to administer the provisions of the Mining Code and the related Regulations.
Within this framework, the Mining Cadastre is established as a semi-autonomous, self-financing entity under the supervisory authority of the regulating entity, responsible for administering the cadastral maps and registries and the intake and processing of all applications concerning mineral rights and related transactions.
16. Example 2:
Part [relevant section] of the [Act][Code][Law] of [Country], sets forth the duties and functions of the authorities responsible for administering the mining law of [Country] in the following 18 articles:
3. [Regulating Authority] to be responsible for administration of [Act][Code][Law]
4. Director to be responsible for implementation of [Act][Code][Law]
5. Duties of the Director
6. Powers of Director and authorised officers
7. Execution and delegation of functions of the Director
8. The Duties of the Director of Geological Survey
9. Execution and delegation of functions of the Director of Geological Survey
10. Authorised officers
11. Establishment of Minerals Advisory Board
12. Responsibilities of the Board
13. Meetings of the Board
14. Power to co-opt
15. Disclosure of interest
16. Annual Report
17. Obstruction of Directors or authorised officers
18. Indemnity of officers
19. [Regulating Authority] and officers prohibited from acquiring mineral rights, etc.
20. Prohibition against the disclosure of information
Drawn from Sierra Leone’s mining law (2009), this provision, though too lengthy to be reproduced here, provides a good example of a chapter that sets forth the responsibilities of an Advisory Board and the key departments of the regulating body. However, the status and functions of the Mining Cadastre Office are set forth in another part of the Act.
A well-conceived and established cadastral system can maximize transparency, clarity and efficiency in the management of mineral rights, and minimize disputes among licence holders, thereby enhancing the security of mineral licence.
The cadastral system provides the framework of basic rules for the identification of mineral licence area boundaries on maps and in the field. At a minimum, a cadastral system requires that all mineral licence areas be polygonal in shape with all borders aligned north-south or east-west based on the most accurate official geographical/topographical maps available for the jurisdiction. At best, a cadastral system requires that all mineral licence areas be composed of contiguous square area units identified on official maps maintained and made available by the mining cadastre. The size of those units is a technical issue that depends on the quality of the jurisdiction’s maps and geodesic network.
A well-functioning cadastral system provides for the maintenance and updating of cadastral maps to show all areas that are either off limits to mineral activity, or subject to restrictions, or occupied by existing mineral rights, or subject to pending applications - in as close to real time as possible.
In best practice, the cadastral system for mineral licences is linked with the function of maintaining a current and accurate registry of mineral licences and transactions, as well as a registry of applications for mineral licences.
The cadastral system and registry may be maintained in hard copy or electronic versions available on a closed network or online.
In best practice, the cadastral system for mineral licences is linked with the function of maintaining a current and accurate registry of mineral licences and transactions, as well as a registry of applications for mineral licences.
The cadastral system and registry may be maintained in hard copy or electronic versions available on a closed network or online.
Technical details may be specified in regulations, provided that the basic principles of the cadastral system and registry are stated in the mining law.
The cadastral system for mineral rights is often separate and apart from the cadastral systems for surface land rights, forest rights, water rights, petroleum rights, etc., but may be integrated into a generalized cadastral system showing all such rights.
17. Example 1:
(1) The Ministry of Mines (Cadastre Minier) is a public office with juristic personality and financial autonomy. It shall fall under [the regulatory authority]. Its articles of association, organisational structure and mandate shall be determined by a Decree of the [President] of [Country]. To cover its operating costs, the Ministry of Mines shall be authorised to collect and manage fees for the filing of applications and annual surface area fees per square meter.
(2) The Ministry of Mines shall be responsible for registering:
a)applications for mining and/or quarrying rights to be granted;
b)the mining and/or quarrying rights accordingly granted as well as decisions to refuse applications;
c)the revocation, cancellation or withdrawal of mining rights;
d)the transfer and subleasing of mining rights;
e)mining financial guarantees.
(3) In addition, it shall be responsible for cadastral surveys for applications for mining and/or quarrying rights, extensions of mining or quarrying rights to other minerals, coordinating technical and environmental assessments for applications for mining or quarrying rights as well as issuing Prospecting rights.
(4) The Ministry of Mines shall certify the minimum financial requirements of those applying for mining, quarrying and prospecting rights.
(5) In addition, the Mining Cadastre shall:
(a) Keep a register of mining and quarrying titles.
(b) Regularly maintain its registers and mining rights maps in accordance with a specific national cadastral system which is open for public inspection.
(c) Record renewals of mining and/or quarrying rights in accordance with the provisions of the present [Code][Act][Law].
(d) Give the applicants concerned written reasons for the findings of the relevant mining appraisals and issue them with mining and quarrying rights according to the scope of authority of the relevant authority.
(e) Record in writing views with regard to the classification, declassification or reclassification of a prohibited area.
(f) Be the decision-making authority in all matters relating to the transfer and subleasing of mining and quarrying rights and thereafter registering the said decisions.
(g) Remove the registration of the Mining or Quarrying Area on the cadastral map.
(h) Have the powers of a notary public with regard to certifying the authenticity of legal instruments relating to mortgaging, subleasing, and transferring of mining and quarrying rights.
(6) The Mining Regulations shall lay down detailed conditions for registering the legal instruments provided for in the present [Code][Act][Law], for the coordination of, and the technical and environmental assessments relating to applications, for notifying interested parties of the findings from mining appraisals, and models for mining or quarrying titles.
Article [_] The shape of Mining and Quarrying Areas
(1) Mining or quarrying rights shall be granted for mineral substances within a specific Area.
(2) An Area shall be in the shape of a polygon made up of whole, adjoining areas, subject to the limitations imposed by the borders of the National Territory and those relating to reserved prohibited and protected areas as specified in the Mining Regulations.
(3) The National Territory has been divided into cadastral mining areas according to the system specified in the Mining Regulations for the appropriate coordinates. These divisions define uniform and indivisible areas, the sides of which are oriented north-south and east-west.
(4) An Area shall not include squares which do not form part of the internal area which is the subject of a mining or quarrying right.
Article [_] The location of Mining and Quarrying Areas
(1) The geographical location of an Area shall be identified by the coordinates for the centre of each of the squares which make up the Area.
(2) Areas shall be indicated on maps using a scale of 1/200,000, held by the Ministry of Mines.
(3) The Mining Regulations shall lay down the terms for the division of the national territory into cadastral mining areas, as well as the rules governing the identification of Mining and Quarrying Areas.
Drawn from DRC’s mining law (2002), this example contains extensive and comprehensive provisions establishing a cadastral system and registry for mineral rights and applications.
Article 12 of the law establishes the Mining Cadastre as an institution, defines its functions, and provides a financing mechanism for its services.
The functions of the Mining Cadastre include the registration of: applications for mineral rights, issued mineral rights, withdrawals and cancellation of mineral rights, transfers and sub-leases of mineral rights, and security interests in mineral rights.
Article 12 also assigns to the Mining Cadastre the functions of performing the cadastral (or spatial) evaluation of applications regarding mineral licences and coordinating the technical and environmental evaluations by the responsible authorities.
The article lists in full all functions assigned to the Mining Cadastre, which include the conservation of all mining and quarrying licences and maintaining on a regular basis the registries and cadastral maps in accordance with a specific national cadastral system. Such registries and maps are available for public consultation.
Article 12 provides that the Mining Regulation will set the details for the maintenance of the registries, the coordination of processing of applications, etc.
Articles 28 and 29 of the same code specify the principle rules for the shape and location of mineral licence areas. They are based on the concept of a national grid system using mapping coordinates and a basic geographical square unit to be defined in the Mining Regulation and oriented North-South and East-West. All mining licence areas must be composed of available, contiguous square units as defined. They are identified and plotted on the cadastral map by the coordinates of the centre of each such square unit on maps of 1:200,000 accuracy. The Mining Regulation provides the technical details.
Other articles from the law specify the role of the Mining Cadastre in connection with the processing of applications for, and administrative or judicial decisions affecting, mineral rights.
17. Example 2:
Article 1. Establishment of the Mining Cadastre Office
(1) There shall be established within six (6) months of the coming into effect of this [Act][Code][Law] a Mining Cadastre Office with the responsibility for the administration of mining rights and the maintenance of the cadastral registers.
(2) The Mining Cadastre Office-
(a)shall be a body corporate with perpetual succession and a common seal;
(b)may sue and be sued in its corporate name; and
(c) may acquire, hold and dispose of property, whether movable or immovable.
(3) The Mining Cadastre Office shall be administered by a [Regulating Authority] who shall be assisted by such officers as shall be required for the efficient functioning of the cadastre system.
(4) In order to fulfil its functions under this [Act][Code][Law] the Mining Cadastre Office shall operate as the sole agency responsible for the administration of mining rights.
(5) The Mining Cadastre Office shall in addition to any other functions prescribed by
or under this [Act][Code][Law] perform the following-
(a)consider applications for mining rights and permits, issue, suspend and upon
the written approval of the [Regulating Authority], revoke any mining right;
(b)receive and dispose of applications for the transfer, renewal, modification, relinquishment of mining rights or extension of areas;
(c)maintain a chronological record of all applications for mining rights in-
(i)a priority book which is to be specifically used to ascertain the priority
and registration of applications for exclusive rights on vacant areas;
(ii)a general registry book which is to be used for all other types of applications where registration of the priority is not required;
(d) undertake such other activities reasonably necessary for the purpose of carrying out its duties and responsibilities under the provisions of this [Act][Code][Law].
Article [_] Central and Zonal Offices of the Mining Cadastre Office
A Central Mining Cadastre Office with exclusive authority and jurisdiction over the whole of the country shall be established in [city] as the headquarters of the Mining Cadastre Office. The Mining Cadastre Office shall, according to administrative convenience, maintain an appropriate number of Zonal offices.
Article [_] Mining Cadastre Registers
(1) The Mining Cadastre Office shall open a series of files to be known as Mining Cadastre Office Registers for the purposes of this [Act][Code][Law], comprising of-
(a)a register of Reconnaissance Permits;
(b)a register of Exploration Licences;
(c)a register of Mining Leases;
(d)a register of Small-scale Mining Leases;
(e)a register of the Water Use Permits; and
(f) a register of Quarry Leases.
Article [_] Boundary
Every mining right, temporary right or mining lease shall be bounded by vertical planes from the surface boundary lines drawn downwards to an unlimited depth from surface.
Drawn from Nigeria’s mining law (2007), this provision provides for the creation of the Mining Cadastre as an agency with sole responsibility for administration of mining rights. The provision specifies the functions of the cadastre and, in particular, the registries of mining rights that the agency is to maintain. The Act does not, however, establish principles for the shape, and alignment of mining right areas, providing only in section 145 that their boundaries will be planes extending downward into the earth to unlimited depth. Presumably, such issues may be clarified in regulations made by the Minister under section 21 to [give] full effect to the provisions of [the] Act”.
By setting forth in the mining law the procedures by which mining rights are acquired, the legislature establishes a basis for holding the issuing authority accountable for the process of issuing mining rights. This avoids the use of unchecked discretion and the related opportunities for corruption in the issuance of mineral rights.
The inclusion of timelines for compliance with license acquisition procedures is similarly important in holding the administrative authority accountable and in ensuring that efficient processing procedures are adopted in order to comply with the timelines. While the examples below indicate a “first come first served” rule, a “tender system” rule is equally valid for license issuance. See Part B for a more detailed discussion on mineral licensing regime.
18. Example 1:
In general, mining licences shall be granted according to a principle of "1st come, 1st served".
(1) Prospecting and operating licences shall be granted by [the regulatory authority], which may delegate these powers.
(2) Small-scale mining licences shall be granted by the relevant authority for the Province concerned, which may delegate this power.
(1) All applications for mining licences are to be made using the prescribed form available from the Ministry of Mines, a template of which shall be set out in the decree implementing the present [Code][Act][Law].
(2) After correctly completing the form, the applicant is to file their application at the relevant office, and retain the acknowledgement of receipt which indicates the date and time, to the hour and minute, that the application was filed, and is evidence of filing.
(1) Prospecting licences relating to a defined area shall be granted by a decision either of [the regulatory authority] or its representative, within no more than thirty (30) working days, to the first eligible person who filed an application which meets the conditions specified in [the relevant article] above.
(2) In cases where the applicant is applying pursuant to an exclusive permit to reserve an area, they are to attach said permit, duly endorsed by the authorities for the Provinces concerned, to their application.
(1) An operating licence for a defined area shall be granted, by a decision of [the regulatory authority] or its representative, to the holder of a prospecting licence or a small-scale mining licence for said area, as the case may be, who filed an application which meets the conditions provided for in [the relevant article] above during the period in which their licence was valid.
(2) All operating licence applications are to be filed together with an environmental impact assessment drawn up in accordance with the environmental protection regulations which are in force, and said report is to be sent by the Ministry of Mines to the department responsible for the mining environment, for assessment and approval from the relevant Authority.
(3) Operating licences shall be issued within no more than thirty (30) working days.
(1) A small-scale mining licence for a defined area shall be granted, by a decision of the relevant Authority for the Province concerned, or its representative, to the first eligible person who filed an application which meets the conditions provided for in [the relevant article] above.
(2) Where the applicant is applying pursuant to an exclusive permit to reserve an area, they are to attach said permit, duly endorsed by the relevant authorities concerned, to their application.
(3) All applications are to be filed together with an environmental impact assessment drawn up in accordance with the environmental protection regulations which are in force, and said plan is to be sent by the Ministry of Mines to the department responsible for the Mining Environment, and approved by the relevant Authority.
(4) Small-scale mining licences shall be issued within no more than thirty (30) working days.
The Ministry of Mines shall assess all mining licence application files and, within twenty (20) days, shall send the ones which meet the required conditions for granting the requested licence to [the regulatory authority] or the relevant Authority for the Province concerned.
The initial mining right shall be issued by the Ministry of Mines once the holder has paid the annual mining administration fees per square metre relating to the first year.
Drawn from Madagascar’s mining law (1999), this example provides clarity as to the procedures and timeline for the issuance of mineral rights by establishing:
- The general rule for issuance of mining rights: “first come, first served”;
- The authority who issues each type of mining right;
- The availability of application forms from the Office of the Mining Cadastre;
- Where the completed application is to be filed (the Office of the Mining Cadastre);
- The timeline for processing and decisions by the issuing authority;
- The criteria for the decision to issue each type of mining right; and
- The requirement to pay the first year’s administrative fees for the mining right area as a condition for delivery of the mining right.
18. Example 2:
(1) Any person who wishes to apply to the [Regulating Authority] for a prospecting right must lodge the application –
(a) at the office of the [Regulating Authority] in whose region the land is situated; (b) in the prescribed manner; and
(c) together with the prescribed non-refundable application fee.
(2) The [Regulating Authority] must accept an application for a prospecting right if
(a) the requirements contemplated in subsection (1) are met; and
(b) no other person holds a prospecting right, mining right, mining permit or retention permit for the same mineral and land.
(3) If the application does not comply with the requirements of this section, the [Regulating Authority] must notify the applicant in writing of that fact within  days of receipt of the application and return to the application to the applicant.
(4) If the [Regulating Authority] accepts the application, the [Regulating Authority] must, within 14 days from the date of acceptance, notify the applicant in writing –
(a) to submit an environmental management plan; and
(b) to notify in writing and consult with the land owner or lawful occupier and any other affected party and submit the result of the consultation within 30 days from the date of the notice.
(5) Upon receipt of the information referred to in subsection (4)(a) and (b), the [Regulating Authority] must begin consideration of the application.
(6) The [Regulating Authority] may by notice in the [Gazette] invite applications for prospecting rights in respect of any land, and may specify in such notice the period within which any application may be lodged and the terms and conditions subject to which such rights may be granted.
(7) Subject to subsection (4), the [Regulating Authority] must grant a prospecting right if –
(a) the applicant has access to financial resources and has the technical ability to conduct the proposed prospecting operation optimally in accordance with the prospecting work programme;
(b) the estimated expenditure is compatible with the proposed prospecting operation and duration of the prospecting work programme;
(c) the prospecting will not result in unacceptable pollution, ecological degradation or damage to the environment;
(d) the applicant has the ability to comply with the relevant provisions of the [Relevant Health Legislation]; and
(e) the applicant is not in contravention of any relevant provision of this [Act][Code][Law].
(8) The [Regulating Authority] must refuse to grant a prospecting right if –
(a) the application does not meet all the requirements referred to in subsection (1);
(b) the granting of such right will –
(i) result in an exclusionary act;
(ii) prevent fair competition; or
(ii) result in the concentration of the mineral resources in question under the control of the applicant.
(9) If the [Regulating Authority] refuses to grant a prospecting right, the [Regulating Authority] must, within 30 days of the decision, in writing notify the applicant of the decision with reasons.
(10) The granting of a prospecting right in terms of subsection (1) becomes effective on the date on which the environmental management programme is approved in terms of [relevant section].
Drawn from South Africa’s mining law (2002), this provision clearly sets forth guidelines for prospecting rights:
- The Authority with whom an application must be lodged;
- The criteria for acceptance of the application;
- The obligation of the Regional Manager to accept the application if it complies with the criteria;
- The timeframe within which the Regional Manager is required to notify the applicant of the acceptance or rejection of the application;
- The subsequent steps required of the applicant in order to complete the application process;
- The obligation of the Regional Manager to forward the completed application to the [regulating entity];
- The criteria based on which the [regulating entity] must accept or refuse an application; and
- The timeframe within which the [regulating entity] must notify the applicant of the basis for her decision to refuse the application, if applicable.
Similar provisions apply to the acquisition of reconnaissance licenses and mining leases under other sections of the law.
These provisions allow the exercise of greater discretion by the granting authority than do those of Madagascar, but nevertheless provide a basis for holding the processing and issuing authorities accountable for the issuance or refusal of mineral rights in accordance with the law.
Mining laws generally impose recordkeeping and reporting requirements on mining rights holders. However, many mining laws are either silent or lax with respect to recordkeeping and reporting requirements of the regulating authority.
Recordkeeping and reporting requirements imposed on the regulating authority by legislation can serve a variety of important purposes, such as:
- ensuring public access to information about the existence, nature, location and ownership of mineral rights;
- ensuring appropriate use and protection of confidentiality of competitive information provided by mineral right holders;
- providing a record for administrative or judicial review of decisions affecting mineral rights or applications for such rights;
- providing a record of inspection results for follow-up and enforcement purposes;
- providing increasingly detailed geological, environmental, production, trade and fiscal revenue information about the country’s natural resource endowment and industries, for purposes of investment promotion, policy-making and policy evaluation;
- promoting transparency and accountability; and
- enabling legislative oversight of the administration of natural resources.
If such requirements are left to the regulations, there is little basis for legislative oversight of the implementation of the mining law. In some mining laws of the Africa region, recordkeeping requirements are found in articles setting forth the duties of certain officials or institutions or in articles describing application and mining right registration procedures. Confidentiality requirements for reports submitted by mining rights holders are also usually set forth in separate articles, as noted in topic 11.
Reporting requirements with respect to geological information and production statistics are sometimes found in articles stating the duties and responsibilities of key departments of the regulating authority. Consideration ought to be given to inclusion in the mining law of a more comprehensive statement of the recordkeeping and reporting requirements applicable to the regulating authority, in order to promote transparency, knowledge base enhancement, accountability and better public understanding of the contributions and challenges of the sector.
19. Example 1:
Article [_] Public access and archiving:
(1) The registries of mining rights applications, issuances, transactions and withdrawals or other extinctions shall be open to inspection by the public during regular business hours or online. Copies shall be made available upon request for a fee to cover the reasonable cost of reproduction.
(2) All entries in the registries of mining rights applications, issuances, transactions and withdrawals or other extinctions shall be signed by the agent who made the entry. The entries made on each day shall be reviewed by the supervisor of the office in which the entries are made, who shall sign the registry for that day. Any corrections shall require the signature of the [Regulating Authority].
(3) All registries of mining rights applications, issuances, transactions and withdrawals or other extinctions shall be archived no less often than on an annual basis, in chronological order, and shall be maintained indefinitely in a secure environment in either hard copy or electronic format.
(4) The administrative services in charge of geology, mining, environmental permitting of mineral activities and inspection of mineral activities shall maintain copies of all studies, reviews, evaluations, data compilations, investigations, inspections and reports, organized within each service by topic and chronological order. Such records shall be archived annually and maintained indefinitely in a secure environment in either hard copy or electronic format. Subject to confidentiality requirements, such records shall be subject to disclosure to the committees of the [National Legislative Authority] with responsibility for oversight of mineral activities and to judicial or arbitration tribunals exercising jurisdiction over a relevant dispute, upon formal request.
Article [_] Reporting
(1) The [Regulating Authority] shall prepare each year a report on the activity of the mineral resource sector during the preceding year, including the following: a description of the major positive and negative developments in the sector during the year; the number of each type of mining right in existence at the beginning and the end of the year; the geographical areas covered by mining rights for mines and quarries, by mining rights, by artisanal mining authorizations or sites, and by quarrying licences; a description of significant geological information developed (subject to confidentiality requirements); statistics of production, sales and royalty receipts for each mineral commodity, by type of mining right or authorization; statistics of employment by type of mining right and position, including average wages or salaries; statistics on health, safety and the efficacy of environmental protection measures in the sector; administrative fee income per type; and allocation or disposition of royalty and fee income.
(2) This report shall be delivered to the commissions of each chamber of the [National Legislative Authority] no later than [date] of each year and shall be posted on the website of the [Regulating Authority] for public review.
Article [_] PublicationThe [Regulating Authority] shall publish on its website: all mineral exploration and/or mining contracts entered into by the [State] or state-owned enterprises; summaries of all preliminary and final environmental impact assessments or studies for mineral projects; the [Regulating Authority]’s annual report on the sector; and annual statistical summaries of exploration and mining results, royalties and fees charged and received.
This is an example of a record keeping and reporting requirement that seeks to accomplish the following objectives:
- Free public access to information as to the location, nature and ownership of all mining rights;
- Responsibility of officials for the accuracy and truth of information recorded in all mining rights and transaction registries, with safeguards against manipulation;
- Indefinite archiving of all internal reports such that they are available for review in formal legislative and judicial or arbitral proceedings (for easy implementation, such archiving should probably better be maintained electronically);
- Annual legislative oversight of the performance of the minerals sector; and
- Transparency and public awareness of mineral sector performance and contracts.
19. Example 2:
(1) The [Regulating Authority] shall maintain records of all mineral concessions issued under this [Act][Code][Law] in sufficient detail [including the following]:—
(a) the name of the holder of the mineral concession;
(b) the area subject to the mineral concession;
(c) the date of issue and duration of the mineral concession; and
(d) the mineral for which the concession is granted.
(2) Records maintained under subsection (1) shall be open to inspection by members of the public during normal Government office hours, and members of the public shall be permitted to take copies thereof.
Drawn from Botswana’s mining law (1999), this example requires the regulating authority to collect and make available to the public information on mineral rights granted under the law. It is also drafted to enable the regulating authority to collect other relevant data such as records of transactions involving mineral rights. Unlike example 1 which provides significant detail of record keeping requirements, this example allows for a concise provision which may be interpreted to require any information concerning a mineral concession when needed. Also unlike example 1, the access to information element is stronger as there seems to be no costs associated with public inspection of records and obtaining of copies of materials of interest.
Generally, dispute resolution provisions lay out processes for resolving disputes related to mining activities within and outside the court system between companies, the government, impacted communities, and others with legal standing. It is good international practice to provide in a mining law what will happen if there is a dispute between the rights holders in the mining sector. This creates trust that any dispute that arises will be dealt with in a clear foreseeable manner. When provided for, the provisions are often limited in scope in order to accommodate issues that may arise in contract negotiations with investors and/or obligations undertaken by countries who are party to Bilateral Investment Treaties (”BIT”). These provisions may include reference to arbitration or mediation for disputing parties, and will frequently designate which authorities possess the jurisdiction to adjudicate disputes and the scope of disputes to be adjudicated. It is important to ensure consistency with other laws that may also address this topic such as investment laws.
Jurisdiction provisions are different from governing law provisions which provide for the law which should apply to the dispute when the courts, arbitral tribunals or other alternative dispute resolution entities have jurisdiction.
Where the mining law provides for jurisdiction (such as national courts), it should explicitly establish whether such jurisdiction is exclusive or not. This is because when the jurisdiction provision is not exclusive, the result will be that each mining permit and concession and other contractual documentation could have different dispute jurisdictional mechanisms, such as courts and arbitral tribunals, which could give rise to forum shopping as well as different types of decisions in the same type of dispute. This gives flexibility to the parties but not necessarily foreseeable results which can be relied on in future disputes, thus defeating the objective of a consistent legal regime. An exclusive jurisdiction clause could have multiple layers such as the obligation to mediate prior to filing a claim before an arbitral body or a court.
Best international practices suggest that whatever mechanism is chosen that it be clear as to which types of disputes will be covered by the jurisdictional provision disputes. For example, will the provision (courts or arbitrators or dispute boards or mediators etc.) cover administrative disputes such as license and permit granting and revocation of such license and permits; third party complaints such as human rights and environmental issues; expropriation of land; disputes between the parties to a permit or concession over taxes, revenue, royalties, mine safety etc.
For a clear and stable regime, it is also best to have a simple rule where the scope of subject-matter jurisdiction is universal, meaning it applies to all disputes arising out of the sector. The reason for this is that parties will often waste precious time disputing which matters fall within the jurisdiction of the body (courts, arbitration, administrative tribunals, dispute boards, mediators etc.) as a litigation strategy to avoid a decision on the underlying dispute.
Mining laws generally encourage alternative dispute resolution mechanisms such as amicable resolution amongst the parties followed by mediation, a process of negotiation with the support of a neutral third party. While very similar to arbitration, mediation differs in that there is no need to submit evidence or testimony, as is typically expected in an arbitration process. It also differs in the sense that, mediation is usually not binding on the parties. While mediation is not binding, it does provide a mechanism for the parties to address many of the matters at issue, and in some cases, resolve some of the matters at issue, prior to resorting to arbitration or the national courts.
Due to the instability of certain judicial systems at least as perceived by investors, many investors prefer international arbitration. Some of the perceived advantages of arbitration are: it is private, the parties choose the arbitrators, the arbitral forum is deemed more neutral and it usually involves sector-specialized arbitrators, arbitration may be more efficient because the deadlines are fixed by the parties with the arbitrators, the decision is final and can only be appealed in limited circumstances. In addition, for countries who are signatory to the New York Convention, arbitral decisions are automatically enforceable (subject to exceptions detailed under Article 5 of the Convention) making it relatively easy to get an arbitral award executed.
It is essential for a mining law to properly outline the dispute resolution process as a key piece in building a transparent legal framework for the country’s mining sector. Given that mineral development agreements in Africa often establish dispute resolutions forums outside the resource country, it may be beneficial to consider requiring the utilization or exhaustion of local dispute resolution processes (judicial and non-judicial) prior to seeking out international forums in order to further the local development and/or consolidation of rule of law culture for the sector. However, this also requires that any dispute resolution structure created locally be independent, above reproach and fully equipped with the resources and expertise necessary to effectively resolve disputes. When the national courts are neutral, fair and efficient and investors can be convinced of their reliability, then national courts are a good choice because they promote the rule of law in the country.
Ultimately, drafters of contracts and agreements entered into in the context of the mining law are advised to be vigilant to ensure coherence between the dispute resolution clauses in the contract and those in the mining law.
A mining law may choose to address jurisdiction as a topic on its own or as part of provisions addressing the function and collaboration among regulating bodies.
As noted above, jurisdiction provisions detail what forum(s) will resolve disputes arising out of activities in the sector and what matters may come before such forums. For a clear stable regime, the mining law should seek to streamline dispute resolution processes to eliminate forum shopping and promote consistent resolution of disputes.
20.1. Example 1:
(1) Where a dispute arises between a holder of a mineral right and [Country] in respect of a matter expressly stated under this [Act][Code][Law] as a matter which shall be referred for resolution, good faith efforts shall be made through mutual discussion and alternative dispute resolution procedures, to reach an amicable settlement.
(2) Where a dispute arises between a holder who is a citizen and [Country] in respect of a matter expressly stated under this Act as a matter which shall be referred for resolution, which is not amicably resolved as provided in subsection (1) within thirty days of the dispute arising or a longer period agreed between the parties to the dispute, the dispute may be submitted by a party to the dispute, to arbitration for settlement in accordance with the [Domestic Arbitration Law] or any other enactment in force for resolution of disputes.
(3) Where a dispute arises between a holder who is not a citizen and the [Country] in respect of a matter expressly stated under this Act as a matter which shall be referred for resolution under this section, which is not amicably resolved as provided under subsection (1) within thirty days of the dispute arising or a longer period agreed between the parties to the dispute, the dispute may, by a party to the dispute giving notice to all other parties, be submitted to arbitration:
(a) in accordance with a[n] international machinery for the resolution of investment disputes, as agreed to by the parties, or
(b) if the parties do not reach an agreement under paragraph (a) within thirty days, or a longer period agreed between the parties, of the matter being submitted to arbitration, in accordance with
(i) firstly, the framework of a bilateral or multilateral agreement on investment protection to which the [Country] and the country of which the holder is a national, are parties, or
(ii) secondly, if no agreement contemplated by subparagraph (i) exists, the rules of procedure for arbitration UNCITRAL Rules.
(4) Each agreement granting a mineral right shall contain provisions on the method of resolution of disputes that may arise under the agreement.
Inspired by Ghana’s mining law (2006), this provision first indicates the scope of disputes justiciable under the provision, namely all disputes arising from a matter expressly covered by the law. It then creates a dual step that requires the use of alternative dispute resolution as the primary forum before the use of an arbitral forum. The provision also distinguishes between disputes between the Government and nationals and disputes between the Government and foreign nationals. However, it does not clarify the definition of a national. It would be important to clarify if a mining operating company which is established subject to the national laws of the country but is wholly owned by a foreign company is deemed a national or a foreign national.
This bifurcation of forums between nationals and non-nationals is attractive to foreign investors, who generally prefer for forum to be determined by contract.
Paragraph 4 is a good clarifying/streamlining element for a provision that provides for several different forms of dispute resolution because it requires parties to specify in the contract the specific method of dispute resolution, selected from the options offered by the mining law.
20.1. Example 2:
(1)Any dispute arising between the holder of a mining right and [Country] in respect of the interpretation and application of this Act, its Regulations and the terms and conditions of mining rights shall be resolved, in the first instance, on an amicable basis.
(2)Where the dispute is in the nature of a bona fide investment dispute, and such dispute is not amicably settled as provided under subsection (1) of this section, it shall be resolved in accordance with the provisions of the [Domestic Arbitration Law] [or any other enactment in force for resolution of disputes].
(3)Any other dispute between the holder of a mining right and the [Country] shall be resolved in the Federal High Court, if not settled in accordance with the provisions of subsection (1) or (2) of this section.
Drawn from Nigeria’s mining law (2007), this provision also provides for the scope of disputes justiciable under the provision (albeit more detailed to include terms and conditions deriving from the mining right, i.e. the contract). It also provides for a multiple step forum though in this case, a three step forum, incorporating the courts as the third and final forum. Unlike in Example 1, it does not provide for a duration for the progression of disputes from one forum to the next.
As noted above, to the extent that national courts are neutral and efficient, foreign investors may be persuaded to use the national courts in lieu of international arbitration. The use of national courts is also likely to contribute to building capacity within the respective national judiciary in handling mining disputes. The exhaustiveness of the scope which eliminates the use of contracts to multiply potential forums and the non-discriminatory approach to all mining rights holders also promotes consistent resolution of disputes.
Due process, often referenced in more detail in other national laws of a country, outlines certain procedural guarantees that will protect the parties’ interests. It is valuable for a mining law to address or restate (where applicable) due process guarantees as part of ensuring a consistent, stable legal framework for the country’s mining sector. Due process guarantees are also particularly important as a concept as it applies to the creation and management of review boards, experts, and similar institutions or roles.
20.2. Example 1:
(1) Subject to the [Domestic Administrative Justice Law], any administrative process conducted or decision taken in terms of this Act must be conducted or taken, as the case may be, within a reasonable time and in accordance with the principles of lawfulness, reasonableness and procedural fairness.
(2) Any decision contemplated in subsection (1) must be in writing and accompanied by written reasons for such decision.
Drawn from South Africa’s mining law (2006), this provision references a relevant national law that regulates administrative procedures. While it does not mention “due process” explicitly, the substance of the provision ensures procedural due process.
20.2. Example 2:
The rights provided under this [Law][Act][Code] with respect to all activities related to the obtaining, possession, exploitation and commercialization of minerals are guaranteed in accordance with the due process provisions of the Constitution.
Unlike example 1, this suggested provision references a constitutional guarantee which can be interpreted to incorporate both procedural and substantive elements of due process.
In cases where the mining law provides for alternative dispute resolution mechanisms that do not carry enforceability powers, resolutions arrived at in such forums are generally only enforceable if incorporated into an official court judgement. As such, where a mining law allows for such mechanisms, it should also clarify whether such decisions are enforceable by virtue of the law or whether such decisions should seek the imprimatur of the courts in order to be enforceable.
20.3. Example 1:
(1) The [Authorized Jurisdictional Forum] other than a court, may file for execution, any order made under [relevant section] (Dispute Settlement Jurisdiction Provisions) to a court presided over by a [Judicial Reviewer] within the local limits of whose jurisdiction the subject matter of the order is situated.
(2) On receiving the order under subsection (1), the court shall cause the order to be enforced as if that order was made by the court.
(3) The fees payable upon the enforcement of an order shall be those which would be payable upon the enforcement of the like order made by the court concerned.
Drawn from Tanzania’s mining law (2010), this provision explicitly provides for the procedural steps to be taken in order to enforce decisions made by bodies other than the courts possess inherent authority. In this case, such orders or decisions are filed with the court with subject matter jurisdiction to render them enforceable.
20.3. Example 2:
(1) Decisions made by the arbitrator shall be binding and an application regarding enforcement said decisions may be brought before any court with jurisdiction in the National Territory according to the procedures provided for in the [Code of Civil Procedure for the Country] or in the mining right holder's country.
(2) Should the provisions of the above paragraph be applied; the State shall waive any immunity relating to jurisdiction or enforcement.
Drawn from DRC’s mining law (2002), this provision makes the decision of an arbitral body enforceable and goes further to waive any sovereign immunity defence against such awards.
Governing law is a principle that is often stipulated in contracts rather than in laws. When contracts choosing which law should govern disputes, the national law should apply. However, there are exceptions to this general principle which include instances where there is no applicable national law or the applicable national law is insufficient.
While some investors prefer the application of foreign governing law (e.g. Chinese Law, French Law, English Law), it should be a rare case where foreign law is chosen to govern mining disputes. Some mining laws provide for the parties to decide on the governing law in the mining contracts.
It should also be noted that choosing a foreign law to apply to investment mining disputes will have the result of nullifying any national mining law and all national laws which generally is not a good idea if a country wants to reinforce the rule of law in its country. Consequently, a mining law may choose to preclude choice of law provisions from contracts that derive from it and instead mandate the application of national laws.
20.4. Example 1:
The resolution of any dispute arising under any of the provisions of this [Law][Act][Code] between holders of minerals rights and between another holder of such rights and the [Country] shall be governed by the respective provisions provided for in such agreements.
Drawn from Liberia’s mining code, this provision allows for the contracting parties to decide what law applies. As noted above, this language can effectively nullify aspects of the Liberian mining law with respect to mineral contracts that derive from it.
20.4. Example 2:
The laws of [Country] shall govern all contracts between the holders of mineral rights and the [Country], unless otherwise waived by the [Country] with the consent of the [National Legislative Authority].
Unlike in example 1, this suggested language creates a default application of national laws in mining disputes unless the application of the law is waived through an open and democratic process. While this approach may not be attractive to foreign investors, it promotes the evolution and strengthening of rule of law locally.
Generally, legislation authorizes expropriation when it is the public interest. Fair compensation is critical to the proper functioning of the concept of expropriation. (For discussions on land-related expropriation and the concept of eminent domain, see Part D of the Guiding Template). When a country’s constitution provides articles concerning expropriation, the mining law should reference the Constitution.
21.1 Example 1:
Expropriation is prohibited except as provided in [relevant article] of the Constitution.
Drafted to reference a constitutional provision and in this case, a provision drawn from Liberia’s Constitution, Article 24, this provision simply refers to the relevant article of the constitution. In this case, the constitutional provision focuses on the right to expropriation by the government, in the event of armed conflict or where public health and safety are endangered, or for any other public purpose.
It provides for prompt payment of just compensation and offers the right to the owner of the property to freely challenge the decision before a court of law. It also offers to the former owner of the property the right of first refusal to reacquire the property in the case the property ceases to be used for public use.
The constitutional provision is replicated below:
a) While the inviolability of private property shall be guaranteed by the Republic, expropriation may be authorized for the security of the nation in the event of armed conflict or where the public health and safety are endangered or for any other public purposes, provided:
(a) that reasons for such expropriation are given;
(b) that there is prompt payment of just compensation;
(c) that such expropriation or the compensation offered may be challenged freely by the owner of the property in a court of law with no penalty for having brought such action; and
(d) that when property taken for public use ceases to be so used, the Republic shall accord the former owner or those entitled to the property through such owner, the right of first refusal to reacquire the property.
21.1 Example 2:
(1) The [Country] assures the safety and legal protection of the ownership of goods and rights, including industrial property rights covered by the authorised and carried out investments under the mining permit issued in accordance with this [Law][Act][Code] and other applicable legislation.
(2) When the public interest so requires and in exceptional circumstances, the holder of the mining right may undertake to expropriate buildings and land necessary for the mining work and the facilities essential for the mining operation, in accordance with the conditions set forth in the legislation in force.
(3) The holder of the mining right must pay any lawful occupant of land required for its activities, compensation for the disturbance of enjoyment suffered by such occupants
(4) In order to calculate the compensation value, the evaluation of expropriated goods and rights as well as financial losses caused to the investors by the State is made within  days, by mutual agreement, and undertaken by a committee constituted for that purpose or by a recognized audit company.
(5) The compensation mentioned in the preceding paragraphs shall be paid within  days, or another time period mutually agreed, from the date of the committee’s decision or of the presentation of the report by the audit firm, based on the evaluation made in the terms of the previous paragraph.
(6) The appreciation time for a decision on the evaluation made and submitted to the competent State authority shall not exceed  days from the date of delivery and receipt of the file.
(7) The compensation due for expropriation for public utility under this Article shall not, under any circumstance be less than the full amount provided for compensation relating to rights of owners set out in other areas of the [Code][Act][Law].
(8) The amount of the compensation must be reasonable enough in order not to compromise the viability of the project, and proportional to the disturbance caused by Mining Activities, in accordance with the procedures set out in the [Code][Act][Law].
Drawn from the mining laws of Guinea (2011) and Mozambique (2014), this provision allows for expropriation only if it is in the public interest, which permits expropriation if required in the public interest and in exceptional circumstances. The provisions suggest that even if the public interest so requires, there must also be a showing of exceptional circumstances. This is important for promoting an investment friendly environment as the rights actions of the state is generally in the public interest.
It also provides for the payment of compensation for expropriation in accordance with national applicable laws, in particular by providing fair, adequate and timely payment of compensation through an independent valuation. The law also seeks to strike a balance between the mineral right holder and the owner of the expropriated property in order to ensure that the viability of the mineral project is not affected and the expropriated person receives fair compensation.
As a general matter, force majeure concerns unforeseeable and unavoidable conditions such as war whether declared or not, civil disturbances, riots, blockades, sabotage, embargo, natural disasters, earthquakes, fire, floods, volcanic eruptions and the like. It does not include preventable conditions such as but not limited to labour strikes or a building collapsing due to poor construction.
In civil law jurisdictions, the Civil Code usually has an Article which defines the concept of Force Majeure and which would normally apply to mining activities. In Common Law countries, force majeure is typically dealt with in mining contracts. However, countries may consider providing for force majeure in a mining law.
21.2 Example 1:
(1) Any events, acts or circumstances which are unforeseeable, compelling, beyond the control or the wishes of a Party and which prevent said Party from performing their obligations, or which make it impossible for said Party to perform their obligations, constitute force majeure.
(2) The following events may constitute force majeure:
(a) war (whether declared or not), armed insurrection, civil unrest, blockades, riots, sabotage, embargos, and general strikes;
(b) any natural disaster, including epidemics, earthquakes, storms, floods, volcanic eruptions, tsunamis or other types of extreme weather, explosions and fires; and
(c) any other cause which is not within the control of the Party involved, as defined in the present article, but excluding economic hardship resulting from adverse market price fluctuations.
(3) Accordingly, the following does not constitute force majeure within the meaning of the present [Code][Act][Law]: any reasonably foreseeable act or event that could be guarded against by exercising reasonable diligence. Similarly, any act or event that would make it more difficult or onerous for the person liable to perform an obligation to do so does not constitute force majeure.
(4) As soon as possible after an event of force majeure has occurred or has been discovered, and by no later than fifteen (15) days of its commencement, the Party who invokes force majeure must notify the other Party, by registered letter with acknowledgement of receipt, setting out the elements of the force majeure and its probable consequences for carrying out the obligations contained in the legal instrument which establishes the obligations.
(5) The Party concerned must at all times take any measures necessary to minimise the impact of the force majeure occurrence on the performance of their obligations and to ensure that normal performance of the obligations affected by the force majeure occurrence is resumed within the shortest possible time.
(6) If, following the occurrence of force majeure, the performance of the obligations is suspended for longer than one (1) month, the Parties must, at the request of either party, meet as soon as possible to consider the implications of said events as regards the performance of the Agreement and, in particular, as regards any kind of financial obligation imposed on each Party, their affiliates and their subcontractors. In this last case, the Parties should try to find a suitable financial solution to adapt the Project to the new situation, in particular, taking any measures which shall ensure that the Parties' economic situation stabilises in such a way that they may continue with the Project.
(7) In the event that there is disagreement regarding the measures to be taken three months after the event force majeure has been declared, either Party may immediately start conciliation proceedings failing which, arbitration proceedings.
Drawn from Guinea’s mining law (2011), the provision defines force majeure as an unforeseeable event beyond a party’s control which makes the performance of its obligation impossible under the circumstances. The provision enumerates events which can constitute Force Majeure, including wars, natural disasters and more generally, any event beyond the party’s control with the exception of economic hardships and fluctuation in the market price.
The provision excludes events that could have been avoided, had it been for the lack of due diligence of the party. It also excludes the events which only make performance more onerous.
The provision provides for the procedure in case of force majeure and states that the party invoking a case of force majeure has 15 days from the occurrence of the event to notify its co-contracting party including the likely consequences of its occurrence.
The party shall exercise its best efforts to minimize the impact of the force majeure event and shall make effort to ensure, as soon as possible that normal performance of the obligations resumes. If the suspension of the performance lasts for more than a month, the parties shall meet to review the implication of the suspension of the obligations and shall try to reach an agreement to adapt the performance to the new circumstances. If they cannot reach an agreement within three months after the occurrence of the event, the matter can be submitted to a conciliation and an arbitration proceeding at the request of one of the parties.
21.2 Example 2:
The…contract may provide special schemes for force majeure and stability of economic and fiscal conditions, especially in case of worsening conditions for its implementation of the intervention in the [Country], to legislation or regulation after the date of entry into force.
Drawn from Cameroon’s previous oil and gas law (2002), the provision leaves the implementation of force majeure to the choice of the parties to a contract and thus remains vague on its conditions of application.
This topic relates to the immediate measures which must be taken on-site in case of discovery or appearance of other materials or minerals not under license during the execution of the mining right. It is important to address this topic in the mining law to ensure the existence of regulation that allows countries to decide on a case by case basis if they directly want to exercise their rights on the minerals or confer rights to the licensees.
On-site procedure requirements are focused on physically securing the site and refraining from the exploitation of the specific material, until receiving a license, if the rules allow for the obtaining of such license. It is the step immediately before reporting the discovery to the relevant regulating entity. This should be the single way of dealing with discovery of minerals not subject to the existing mining license as it allows the country prerogative to conduct a national interest analysis as to whether such a mineral should be mined or not.
(1) In the case of discovery of a mineral not included in the license granted, the licensee shall:
(a) Secure the area where the mineral was discovered, not allowing third parties to access it without the permission of the Licensor.
(b) Mark the area in the way established by the governing agency, to identify the site.
(c) Immediately stop the exploitation of the mineral not covered by the license granted.
This suggested provision is designed to specifically address the on-site procedures in case a mineral not covered by a valid license is found. The reporting duties are addressed in a different provision. The purpose of this rule is avoid the unlawful appropriation of minerals from the licensee or third parties, and the preservation of the site to facilitate the evaluation of the discovery by the relevant regulating entity.
This topic is used to define unified reporting requirements with which the right holders must comply when they find/discover minerals or materials not under license. It is important to include this topic to assure the flow of information to the country as it is the rightful owner of its own materials and minerals. It is also important to avoid confusion between notification and amendment of the license.
21.3(b) Example 1:
(1) If in the course of exercising his rights the holder of a mining license discovers any other mineral to which such license does not relate, he shall, within thirty calendar days after such discovery, notify the [Regulating Entity] giving particulars of the deposits or the mineral discovered, and the site and circumstances of the discovery, and may apply to the [Regulating Entity] to have the mining of such deposits or such mineral included in his mining license, giving in the application a proposed program of mining operations in respect of that discovery.
Drawn from Sierra Leone’s mining law (2009), this provision shows the above-named important division between notification and amendment. The licensee may apply for an extension apart from the notification of the discovery itself, which shall be an obligation in all cases. If the discovering licensee does not apply for an extension, a third party can apply for it, and the regulating agency can grant it, if that is convenient for the State’s interests.
21.3(b) Example 2:
(1) If in the course of exercising his or her rights under a mining lease the holder of the mining lease discovers any mineral for which the lease does not relate, he or she shall, within thirty days after the discovery, notify the [Regulating Entity] of the discovery, giving particulars of the mineral discovered and the site and circumstances of the discovery; and the holder of the lease may apply to the [Regulating Entity] to have the mining of such mineral included in his or her mining lease, giving in his or her application a proposed program of mining operations in respect of the discovery.
(2) Where the holder of a mining lease does not wish to develop a newly discovered mineral or minerals, and it is in the national interest to do so, the [Regulating Entity] may grant a mineral right under this Act to a third party subject to the reasonable rights of the holder.
Drawn from Uganda’s mining law (2003), this provision, in addition to distinguishing between a notification obligation and opportunity to amend an existing license to include the new discovery, addresses the case in which the discovering licensee does not wish to develop the newly discovered mineral. In such case and if it is in the public interest, the mining right can be granted to a third party.
Since this option could create risks of conflict arising from overlapping mining areas between the initial rights holder and the second rights holder, the State should ensure reasonable accommodation for the first licensee.
This topic is about special rules which should apply to radioactive materials which are discovered during the exercise of a mining right. It is important to regulate this topic because radioactive materials feature unique inherent risks and dangers. These risks and dangers are not only related to the discovery itself, but also to the following disposal, circulation and final use of such materials. These risks are further escalated by the growing ubiquity of non-state or loosely organized radical and violent groups. Many African countries do have a specific code concerning radioactive materials. Therefore, all actions relating to radioactive materials have to be carefully regulated or referenced in the mining law.
21.3(c) Example 1:
(1)The provisions of this Act relating to exploration, and mining of minerals shall apply to radioactive minerals with such modifications as are provided in this Part and as may be prescribed in the Regulations
(2) Where any radioactive mineral is discovered in the course of exercising any right under this Act or any authority under any other enactment, the holder of the mineral right or such other authority shall immediately notify the [Regulating Entity], but in any case, not later than seven calendar days after the discovery.
(3) Where any radioactive mineral is discovered on any land other than land subject to a mineral right, the owner or lawful occupier of the land shall as soon after he is aware of such discovery notify the [Regulating Entity].
(4) The holder of a mineral right in respect of a radioactive mineral shall within the first week of every month, furnish the [Regulating Entity] with a report, in writing, of the exploration and mining operations conducted by him in the immediately preceding month.
(5) No person shall explore for or mine or treat or possess or export or import or otherwise dispose of any radioactive mineral except under and in accordance with the terms and conditions of a permit granted by the [Regulating Entity].
(6) A permit issued under subsection (5) shall be in such form and shall be subject to the payment of such fee as the [Regulating Entity] may prescribe.
Drawn from Sierra Leone’s mining law (2009), this provision indicates the inclusion of the mining of radioactive materials within the scope of the mining law but provides for higher scrutiny of mining activities as it relates to the radioactive materials. This includes immediate notification of such discovery, the strictly regulated reporting requirements of such mining operations and the restrictions of export and disposal of such minerals.
For a clearer regime, it is necessary to include special provisions on the process for obtaining a license to exploit such radioactive materials, more frequent inspection of the mining facilities, and restrictions to the commerce of such minerals.
Finally, it is advisable to include specific penalties for offenses and breaches related specifically to this activity as such offenses may potentially have greater negative impact than offenses related to non-radioactive materials.
21.3(c) Example 2:
(1) If required for the safety of the public, the President of the Republic may, by Decree, and on the recommendation of the [the Regulatory Authority], in accordance with the opinion of the [Geology Division], declare a mineral substance to be "reserved" and hence subject to special rules.
(2) A Decree which classifies a mineral substance as a "reserved" shall specify the rules and provisions which the substance is subject to. The declaration shall be published in the [Official Gazette].
(3) Thorium and uranium ores and, in general, all radioactive ores shall fall under the rules for reserved materials provided for in the above paragraphs of the present Article.
Drawn from DRC’s mining law (2002), this provision creates a “reserved class” of minerals based on safety needs. These minerals are subject to specific rules that are enumerated by special decree of the President. This provision also makes a point of naming specific minerals (uranium, thorium, and all radioactive minerals) as automatically being placed in this class of mineral substances.
A mining law should seek to define general offenses that apply to all mining rights and the legal consequences imposed, in addition to ones unique to specific mining rights. A mining law may also incorporate references to appropriate offenses and legal consequences as enumerated under other national laws such as criminal, fraud, labour etc. Penalties need to be commensurate with the type and gravity of the offence, as well as correlated with different applicable sanctions. If appropriate, the law should primarily provide for administrative sanctions or fines, which are generally easier to impose/execute than criminal sanctions.Some countries like Uganda provide for a general penalties law that specifies the fines to be paid in “currency points” or “currency units”. This is to accommodate currency fluctuations and regulate severity of the fines without modification of the mining law.
22.1 Example 1:
(1) No person may explore or prospect for, or retain or mine or dispose of any mineral in [Country] except under, and in accordance with, a licence issued under this [Act][Code][Law].
(2) Any person who contravenes subsection (1) of this section commits an offence and is liable on conviction –
(a) in the case of an individual, to a fine not exceeding twenty-five currency points, or imprisonment for a term not exceeding one year or both; and
(b) In the case of a body corporate, to a fine not exceeding fifty currency points.
(3) Where a person is convicted of an offence under subsection (2) of this section, the court before which such person is convicted may –
(a) Order the forfeiture of all minerals unlawfully obtained by such person;
(b) And in the event that the minerals cannot for any reason be forfeited, order the forfeiture of such sums of money as the court shall assess as the reasonable value of the minerals; and any minerals or their value so forfeited shall become the property of the Government and shall be disposed of as the [Regulating Authority] may direct.
Drawn from Uganda’s mining law (2003), the provision includes a difference of the severity of the fines between individuals and corporations. This is based on the alleged different capacity to bear a fine but more specifically as a disincentivizing measure.
The example also establishes a procedure that involves courts for its execution. In African countries with civil law systems, fines may be treated as an administrative punishment, and thus be decided and enforced by administrative entities without need for judges, who would in any case be able to control the legality and constitutionality of government actions.
22.1 Example 2:
(1) Any person who contravenes chapters 4, 5, 6, and 7 of this [Law][Act][Code] hereof shall be guilty of an offense and shall be liable upon conviction in a court of law.
a. In this case of an individual, to a fine not exceeding Two Thousand United States Dollars (USD$2,000:00) or its equivalent in Liberian Dollars or to imprisonment for a term not exceeding twenty –four (24) months or to both such fine and imprisonment and
b. In the case of any other Persons to a fine not exceeding twenty-five thousand United States Dollars (USD$25,000:00) or its equivalent in Liberian Dollars.
(2) The court before whom a Person is convicted under Section [_] hereof may order the forfeiture of all Minerals obtained by such Person or if such Minerals cannot be located of such sum of money as may represent the value of such minerals. Any mineral so confiscated shall be sold or otherwise disposed of as the Court may direct and the proceeds of such sales shall be paid into the Mineral Development Fund.
Drawn from Liberia’s mining law (2000), this provision focuses on violations of the code with criminal law implications. Depending on the harm caused by the offense, governments can consider using criminal law penalties. However, officers must know that the enforcement of criminal penalties requires a higher legal standard of evidence, which makes them more difficult to be successfully applied. The criminal procedure is usually regulated in a specific procedural code.
In all cases, including the previous example, the forfeiture of the mineral extracted as the result of a legal violation is part of the penalty or a mechanism to enforce the economic penalties.
Mining activity entails high risk for all the stakeholders involved. Since a substantive share of the activities are carried out by the operator (either a private corporation or a state owned company), thus making it the better risk bearer and the liability should be clearly borne by the operator. The operator should clearly know the extent of that liability, and if it extends to its shareholders, agents or other representatives.
Insurance and warranties can replace liability, but if they are not available or applicable for any reason, the responsibility of indemnification resides in the operator or holder of mineral rights.
22.2 Example 1:
(1) The holder of a mineral right shall indemnify, defend and hold the [Country] harmless against all actions, claims, demands, injury, losses or damages of any nature whatsoever, including claims for loss or damage to property or injury or death to persons, resulting from any act or omission in the conduct of mining operations by or on behalf of the holder.
(2) Such indemnity under subsection (1) shall not apply to the extent, if any, that any action, claim, demand, loss, damage or injury has resulted from any direction given by, or wrongful act committed on behalf of, the [Country].
Drawn from Tanzania’s mining law (2010), this provision places liability obligations in the rights holder except in cases where the wrongful act was ordered or carried out by the country.
22.2 Example 2:
Holders of mining rights are liable to the State for breaches committed under this [Law][Act][Code] by themselves, their employees, agents, contractors and/or subcontractors. When several persons jointly hold Mineral or Quarry Rights, their liability is joint and several.
Drawn from Liberia’s mining law (2000), this provision provides for joint and several liability to eliminate the determination of relative culpability and avoid compounded disputes concerning the extent of liability when multiple parties are involved.
A mining code may list in one provision the different categories of rights that are offered which allow authorized mining activities to take place. There are typically several options for mineral rights. Most (but not all) mining laws make a distinction between rights for exploration and exploitation of metallic or processed minerals and precious stones, on the one hand, and exploitation of industrial minerals, on the other hand.
The mining laws of all countries in Africa require separate mining rights for pre-exploitation activities – such as reconnaissance, prospecting or exploration – on the one hand, and either mining or quarrying, on the other hand. However, the mining laws of some Latin American countries such as Mexico and Peru provide for the grant of a single concession for exploration and mining.
The earliest stage of superficial investigation of mineral occurrences is generally called “reconnaissance” in Anglophone African countries and “prospection” in Francophone African countries. It is frequently not an exclusive right. The subsequent phase of exclusive, in-depth investigation is called “prospecting” in many Anglophone African countries and “exploration” or “recherche” in Francophone African countries.
Some Anglophone countries provide for an “exploration” licence following the expiration of the “prospecting” licence. Other Anglophone countries also provide for a retention licence available at the termination of the exploration licence for the purpose of maintaining an exclusive right to a significant mineral deposit the exploitation of which is not commercially feasible due to temporary financial, commodity market or technical conditions.
Countries that favour greater administrative control over mineral activities tend to provide for licencing of more separate phases of pre-mining activity, whereas countries that favour an investment-friendly environment tend to provide for licencing of fewer separate phases of pre-mining activity.
Some but not all countries provide for the licencing of prospecting or exploration for industrial minerals. Those that do not do so tend to be the countries that grant quarrying licences only to the owner of the surface estate.
At the mining stage, there may be several types of mining rights, depending on the type of mining involved, rather than on phases of operations. The types of mining rights may include a small-scale mining lease, a semi-industrial mining lease, an industrial mining lease, and a tailings mining lease.
For quarrying at the exploitation stage, there may be a temporary quarrying lease (for particular infrastructure construction projects) and a permanent quarrying lease for the long term exploitation of industrial minerals for sale.
23. Example 1:
(1) Mining permits shall have the following classifications:
(a) "R" licences, which confer on the holder an exclusive right to carry out prospecting and reconnaissance work within a demarcated area;
(b) "E" licences, which confer on the holder an exclusive right to undertake operations, as well as prospecting and reconnaissance, within a demarcated area;
(c) Small-scale mining licences (Permis Réservé aux petits Exploitants miniers "PRE ") which confer on small-scale mining operators the right to undertake prospecting, reconnaissance and operations within a demarcated area.
Drawn from Madagascar’s mining law (1999), this example states that only three mining rights are available under the Act for operations with respect to metallic or processed minerals and precious stones:
- The R Permit for prospecting and minerals research or exploration within the delineated area;
- The E Permit for exploitation, as well as prospecting and research within the delineated area; and
-The PRE Permit reserved for small producers conferring the right to undertake simultaneously prospecting, research and exploitation within the delineated area.
23. Example 2:
(1) Subject to the provisions of this [Act][Code][Law], the right to search for or exploit mineral resources is obtained through one of the following mining rights in the form of-
(a) a Prospecting/Reconnaissance Permit;
(b) an Exploration Licence;
(c) a Small-scale Mining Lease;
(d) a Mining Lease;
(e) a Quarry Lease; and
(f) a Water Use Permit.
Drawn from Nigeria’s mining law (2007), this example sets forth in a single article all of the different types of mining rights available under the Act, but does not explain the differences among the rights. This type of article should be followed by separate subsections devoted to each type of mining right, commencing in each case with an article describing the type and scope of activities authorized by the respective mining rights. For example:
A Reconnaissance Permit confers on the holder the [exclusive] [non-exclusive] right to conduct reconnaissance activities for [specified minerals] [metallic or processed minerals] within the specified Reconnaissance Permit area during the term of the licence, subject to the conditions specified in this law.
In this example, “reconnaissance activities” should be a defined term.
Issues to be considered in drafting the corresponding language for each type of mineral licence include: (i) whether the licence confers an exclusive or a non-exclusive right, and (ii) whether the licence confers a right with respect to all metallic or processed minerals and precious stones or only a right with respect to specified minerals.
If the rights conferred by the licence are for specified minerals only, then the law should specify whether a licence may be issued to another qualified person to conduct mineral activities with respect to other minerals within the same area; and if so, what types of mineral licences for what types of minerals. It is frequently the case to provide for the issuance over the same area of both (a) a prospecting or exploration licence for metallic or processed minerals and/or precious stones and (b) a quarrying licence. It is less frequent and potentially controversial to provide for the issuance of two or more exploration or exploitation licences for metallic or processed minerals and/or precious stones over the same area.
Prospecting/reconnaissance activities typically involve the preliminary assessment of the concentration and type of minerals on or under the land within a defined area. These activities must often be conducted with a licence or authorization from a designated regulatory body, and generally do not permit the extraction of any minerals from the land, other than small quantities of samples taken from outcroppings for analysis. Prospecting/reconnaissance often, but not always, serves as a precursor to follow-on work under an exploration licence if indications of significant mineral concentration are found.
A mining law may restrict what classes of individuals or legal entities can receive a permit or authorization to conduct prospecting/reconnaissance activities, either by defining who may or may not apply for the right, or by defining prior conditions that must be met before such an entity can be considered eligible to apply. The eligibility requirements for this type of licence should clarify whether individuals and/or corporate entities are eligible, whether foreign and national persons are eligible, and whether any technical or financial capability is required for eligibility, as well as any criteria for disqualification.
Because the work authorized by the licence for this preliminary phase of activity is non-intrusive and not intense, the eligibility requirements are generally less restrictive than for other mining rights. In some jurisdictions, there is freedom to exercise this activity and there is no mineral licence required for it, although registration and identification are typically required.
24.1 Example 1:
(1) Any natural person or legal entity with the required technical and financial ability to carry out reconnaissance surveys for indicators, and prospecting for mining and quarry materials, may carry out said activities under the terms of the present Act. A Decree of the [President] shall specify what is meant by "technical and financial capacities."
(2) Persons or companies which are subject to international sanctions or criminal investigations related to fraud, corruption or money laundering may not obtain mining or quarrying titles.
(3) No natural person may obtain or hold a mining title or permit in the event that:
(a) they suffer from a legal disability preventing them from acting in their own name; or
(b) they have been imprisoned for violating the provisions of the present [Code][Act][Law] and its implementing regulations.
Drawn from Guinea’s mining law (2011), this article recognizes both individuals and entities, regardless of nationality or place of formation, as eligible to engage in prospecting/reconnaissance activities under the conditions set forth in the law. This is a very broad provision. It also requires, however, that the individual or entity have the necessary technical and financial capacity as a condition of eligibility for prospecting/reconnaissance rights. The article delegates to the President of the Republic the authority to specify what is intended by the term “technical and financial capacity”. Thus, in this example, the legislature establishes a very broad criteria of eligibility for authorization of prospecting/reconnaissance activity, but enables the executive to limit eligibility based on technical and financial capacity criteria that the executive is authorized to establish.
The article also specifies additional types of persons not eligible for any mineral rights, including:
- Persons subject to international sanctions or criminal investigation for fraud, corruption or money laundering,
- Any individual whose status is incompatible with the exercise of commercial activities, such as public officials, and
- Any individual condemned and sentenced to prison for violation of any provisions of the Mining Code and its implementing decrees.
24.2 Example 2:
A qualified applicant for a Prospecting/Reconnaissance Permit is-
(a) a citizen of [Country] with legal capacity and who has not been convicted of a
criminal offence; or
(b) a body corporate duly incorporated under the [Companies Act]; or
(c) a Mining Co-operative.
(1) The following persons shall not be eligible to obtain or hold licences set forth in this [Law][Act][Code]:
(a) The President, Vice-Presidents, Ministers, Chief Justice and members of Supreme Court, Attorney General, members of the National Assembly, Heads and members of the Independent Government Commissions, Governor of the Central Bank and General Director of National Directorate of Security, Provincial Governors, Mayors, and General Directors of the Government Independent Agencies, advisors, experts and Deputy Ministers of the [Mining Regulating Authority] and their relatives up to the second degree of consanguinity or by marriage.
(b) Judges, Prosecutors, Members of Provincial and District Councils, any Employee of the Ministry [in charge of Defence] or Ministry [in charge of Interior Affairs] or of the General Directorate of National Security, advisors, as well as experts and staff of the Commission, stipulated in [relevant article] of this [Law][Code][Act] (describing the membership of the Commission that reviews all licencing decisions and mining agreements, among other things);
(c) Any person who has been declared bankrupt and who continues to be bankrupt under the laws of [Country];
(d) Any person whose licence has been prematurely revoked, based on justifiable reasons, by the [Regulating Authority] prior to the expiry of the licence term.
(e) Companies in which the listed figures in (a) above, have obtained or will imminently obtain direct or indirect benefits;
(f) A natural person who has been convicted by a court of competent jurisdiction to more than ten (10) years in prison or has been convicted of administrative corruption and who has completed his or her prison term but has not yet had his or her prestige restored;
(g) Any legal person which is under a liquidation process, unless the liquidation is for the restructuring of such legal person;
(h) Any legal person that is subject to an order of dissolution issued by a court of competent jurisdiction;
(i) Any legal person in which one or more of its major shareholders, members of the executive board or members of its board of directors would be legally disqualified.
(j) Where one or more major shareholders of a legal person has been convicted of violation of the provisions of this [Law][Act][Code]; and/or
(k) Any major shareholder of a legal person or a member of its executive board is an existing employee of the [Petroleum Regulating Authority].
(2) Any person whose licence has been revoked, may not re-apply for all or part of its revoked Licence Areas for two years from the date of revocation;
(3) A major share for the purpose of this [Law][Act][Code] means ten percent or more of the total shares of a company.
(4) Any person stipulated in subsections (a) and (b) of Paragraph (1) of this Article may obtain a Licence or Contract provided for in this [Law][Act][Code] five years after termination of their term in office.
Drawn from Nigeria’s Mining Law (2007), the first article in this example clearly and concisely states which Nigerian nationals, locally formed companies and mining cooperatives are eligible for what is called a reconnaissance permit under Nigerian law. The article applies only to the reconnaissance permit and does not mix in considerations other than eligibility. It therefore provides great clarity.
Drawn from Afghanistan’s mining law (2014), the second Article in this example presents a very specific and comprehensive list of persons and companies prohibited from obtaining and holding any type of mineral licence. In some cases the prohibition is unlimited. In other cases the prohibition is removed after a specified time period. Drafters should consider whether transparency and corruption concerns warrant providing such a detailed list of persons and entities that are not eligible for mineral licences. In some countries, the prohibitions against licence holding by public officials are set forth in other laws. In such cases, the issue is more likely to be one of enforcement rather than drafting. Even in those cases it may be desirable to repeat such prohibitions in the mining law so that the application process is designed to screen out persons prohibited from obtaining mineral licences.
Regulatory authorities generally require that eligible persons (or entities) seeking authorization to conduct prospecting/reconnaissance activities submit particular documents or show proof of certain criteria as part of the authorization process. Requirements for Licence applications vary greatly from country to country, and can include (but are not limited to):
- Proof of domicile, for the individual applicant and/or corporate entity seeking authorization;
- Proof of a minimum level of financial and technical expertise to conduct the activities;
- A statement including any research already conducted about the mineral deposit potential of the site in question;
- Payment of fees associated with the application process;
- Submission of duly completed applicable forms.
24.2 Example 1:
(1) An application for the grant of a prospecting/reconnaissance licence shall be submitted to the Mining Cadastre Office in the prescribed form and-
(a) shall contain the registered name and place of incorporation of the company, its certificate of incorporation and certified copy of its memorandum and articles of association, the names and nationalities of its directors and the name of every shareholder who is the beneficial owner of five percent or more of the issued share capital;
(b) shall contain the company profile and history of reconnaissance and exploration operations in Sierra Leone and elsewhere;
(c) shall identify the name and qualifications of the person responsible for supervising the proposed programme of reconnaissance operations;
(d) shall be accompanied by a plan of the proposed reconnaissance licence area over which the licence is sought, drawn in such a manner and showing such particulars as prescribed;
(e) shall be accompanied by a description of the contiguous blocks comprising the proposed reconnaissance licence area, identified in the prescribed manner, which shall be considered definitive should there be any discrepancy with the plan submitted under paragraph (d);
(f) shall be accompanied by a statement giving particulars of the technical and financial resources available to the applicant, and a certified copy of its audited accounts for the year immediately preceding the application;
(g) shall be accompanied by a proposed programme of reconnaissance operations as prescribed setting out in detail the work intended over the next twelve month period together with the estimated cost, with details of the equipment expected to be used in connection with it and the names and particulars of the persons to be responsible for the conduct thereof;
(h) shall state the period applied for which shall be no longer than one year;
(i) shall give details of any mineral right held within Sierra Leone by the applicant or by any person controlling, controlled by or under joint or common control with the applicant;
(j) shall provide details of any significant adverse effects which the carrying out of the programme of reconnaissance operations would be likely to have on the environment and on any monument or relic in the proposed reconnaissance area and an estimate of the cost of combating such adverse effects;
(k) shall give or be accompanied by a statement giving particulars of the applicant’s proposals with regard to the employment of [national] citizens; and
(l) may set out any other matter which the applicant wishes the [Regulating Authority] to consider.
Drawn from the mining law of Sierra Leone (2009), this article requires detailed information about:
1) the applicant company, its directors and principal shareholders;
2) the company profile and its history of prior reconnaissance and exploration activities;
3) the supervisor of its proposed activities;
4) a map (plan) of the proposed licence area;
5) a description of the cadastral blocks comprising the proposed licence area;
6) a statement of the applicant’s technical and financial resources, accompanied by a certified copy of the company’s audited financial statements for the prior year;
7) a proposed program of reconnaissance operations for the next year, including cost, equipment to be used, and particulars of the responsible individuals;
8) the requested licence term (maximum of one year);
9) particulars of any mineral right held by the company or by any affiliate of the company;
10) any significant adverse effects that the reconnaissance activity may have on the environment, any monument or relic in the proposed licence area, with an estimate of the cost of “combating such effects”;
11) proposals regarding the employment of [national] citizens.
This level of information required in an application for a prospecting/reconnaissance licence is high by international and regional standards, particularly for a non-exclusive prospecting/reconnaissance licence as is the case in Sierra Leone. The application requirement indicates that Sierra Leone intends to control access to mineral rights and strictly limit such access to qualified companies that demonstrate an ability to perform serious work programs.
The prospecting/reconnaissance licence under the mining law of Sierra Leone is non-exclusive, does not provide the holder with any priority for obtaining an exploration licence, and is not a prerequisite for obtaining an exploration licence. Given the extent of the application requirement for a prospecting/reconnaissance licence that grants no exclusive rights or priority, it is not surprising that as of September 29, 2016 only 7 such licences have been issued under the mining law of Sierra Leone; all have expired; and none have been issued since 2012. This indicates that the rights provided by the prospecting/reconnaissance permit under Sierra Leone’s mining law are viewed as insufficient for applicants to make the commitments required by the application requirements. These application requirements would be more appropriate for a prospecting/reconnaissance licence that grants an exclusive right over the licence area and the exclusive right to apply for an exploration or mining licence within that area during the term of the prospecting/reconnaissance licence.
24.2 Example 2:
(1) Applications for prospecting permits as provided for in Articles [_] and [_] (on the authority to grant a prospecting permit and its scope) above are to be sent to [the regulatory authority] and must include:
(a) an application, duly signed by the managing director of the company requesting the mining title;
(b) the company's constitutional documents;
(c) the composition of the management team and the positions of its members;
(d) the comprehensive technical programme:
(e) the details of the financial outlay per item;
(f) the detailed business card for the company, along with the latest balance sheet for the financial year for said company:
(g) what the company requires locally.
(2) An application for a prospecting permit is to be drawn up in two original copies, one of which must be stamped, in the case of a general application, and in four original copies, two of which must be stamped, if it relates to substances in categories [_] as provided for in Article [_] (on the classification of mineral substances). It shall indicate the extent of the area and the minerals applied for.
Drawn from the Republic of Congo’s mining law (2005), this provision requires information about the composition and the quality of the members of the applicant’s leadership team, a comprehensive description of the intended technical program and a detailed description of the planned financial effort. As in Sierra Leone, the prospecting/reconnaissance licence available under the mining law of the Congo is non-exclusive and does not provide the holder with any priority for the grant of an exploration licence. That is the case generally in African countries that offer reconnaissance licences
Countries that wish to strictly limit access to prospecting/reconnaissance rights in order to ensure that they are only granted to qualified applicants who can be expected to carry out a serious work program - while respecting the natural and social environment and reporting accurate results of their work - should consider whether the scope of the prospecting/reconnaissance rights are commensurate with the application requirements. If the rights are of very limited value, they are likely to be ignored and bypassed.
Because a prospecting/reconnaissance licence is the entry level licence for authorized mineral development activity, prior to which applicants will not have made any recognized significant investment based on any existing rights, many countries that require or provide such licences provide no recourse under the Mining law in the event that an application for a prospecting/reconnaissance licence is refused. In such cases, any recourse would have to be based on the provisions of general administrative law rather than provisions of the Mining law. However, there may not be any right to obtain a prospecting/reconnaissance licence under the Mining law in those situations – particularly if activity under a prospecting/reconnaissance licence is not required prior to application for an exploration licence. On the other hand, Mining laws typically provide a general appeal process that may cover the refusal of a prospecting/reconnaissance licence – especially where the prospecting/reconnaissance licence is a necessary prerequisite of an application for an exploration licence. For the purpose of a clearer legislative regime, it may be reasonable for mining laws to distinguish between the processes that apply to particular licences such that extensive processes that would apply to a large scale mining licence, could not be interpreted to apply to a prospecting/reconnaissance licence due to the general reference of the enumerated process to all mining licences.
24.3 Example 1:
A decision of the [Regulating Authority] denying the issuance of a prospecting/reconnaissance licence shall not be subject to reconsideration or appeal.
If the mining law provides for the licencing of prospecting/reconnaissance activity but does not require that the applicant for an exploration licence (for the next phase of mineral resource development activity) have previously carried out work on the area under such a licence as a condition for obtaining an exploration licence, and does not grant the prospecting/reconnaissance licence holder an exclusive right to obtain an exploration licence for the subject area (in other words, if the law permits an applicant to forego the prospecting/reconnaissance phase without prejudice) then for the sake of administrative convenience and efficiency it may be reasonable to provide that decisions to reject applications for prospecting/reconnaissance licences are not subject to reconsideration or appeal, as in this example.
24.3 Example 2:
(1) A decision of the [Regulating Authority] denying the issuance of a prospecting/reconnaissance licence shall state the reasons for the decision. The party whose application for a prospecting/reconnaissance licence has been rejected may, within ten business days of receipt of notice of the decision, submit to the [Regulating Authority] a request for reconsideration of the decision, in writing, together with relevant documentation and arguments in writing.
(2) The [Regulating Authority] shall issue its decision on reconsideration, stating the reasons therefore, within thirty (30) days of the filing of a timely request for reconsideration.
(3) If the decision on reconsideration affirms the initial decision of denial, the applicant may appeal the decision on reconsideration in writing together with relevant documentation, to the [Administrative Reviewer] within fifteen (15) business days of receiving such decision.
(4) The [Administrative Reviewer] shall issue his or her decision on appeal in writing, stating the reasons therefore; and said decision shall be notified to the applicant within thirty (30) days of the filing of a timely appeal.
(5) If the decision of the [Administrative Reviewer] on appeal affirms the initial decision of denial, the applicant may, within 45 days of receiving notification of the decision on appeal, apply to the [Judicial Reviewer] for review of the decision and seek such remedy as the [Judicial Reviewer] is empowered to grant.
(6) The filing of a request for reconsideration or appeal of the initial decision of denial does not suspend the administrative decision denying the application unless so ordered by the [Regulating Authority] or the [Administrative Reviewer], as the case may be.
If the mining law provides for a prospecting/reconnaissance licence as an exclusive right, and also provides that only the holder of that right is entitled to subsequently request and obtain a licence for the next phase of mineral resource development activity (e.g., exploration), then the denial of the prospecting/reconnaissance constitutes a barrier to entry into mineral resource development activity.
In such cases, for considerations of accountability, transparency, protection against corruption, and due process, best practice would require (1) reasoned written decisions for denials of applications for prospecting/reconnaissance licences, (2) an opportunity for reconsideration by the regulatory authority, (3) an appeal to a superior administrative authority, and (4) a judicial appeal of the administrative decision on appeal.
The example of such a best practice provision presented here is inspired by provisions of the mining laws of Uganda (2003) and South Africa (2002).
In jurisdictions that licence reconnaissance-type prospecting activity, areas are typically larger than exploration areas, which are usually larger than mining areas, because reconnaissance, prospecting and exploration proceed from larger to smaller areas as the increasingly intense investigation of mineral occurrences identify and focus on a targeted deposit. A mining law may provide for relinquishment, or the process of mandatorily reducing the area under the prospecting/reconnaissance licence during successive renewals.
Because prospecting/reconnaissance licences are for very large areas, if the mining law provides for a prospecting/reconnaissance licence that is exclusive and has a term of more than one year (including renewal), it should require either relinquishment of part of the area (typically half) after the initial year or, alternatively, a doubling of the annual fee per unit area for the second year in order to prevent or discourage the tying up of more area than a company can reasonably investigate during the term (including renewals) of the licence, and to encourage focusing on the most prospective areas.
If the mining law provides for a prospecting/reconnaissance licence that is non-exclusive, or has a term limited to one year, with no renewals, then the risk of non-productive tying up of excessive areas is low. If the licence is exclusive but limited to a one year nonrenewable term, the mining law will likely not grant an exploration licence for the subsequent phase of mineral resource development activity over the entire area covered by the prospecting/reconnaissance licence because the maximum size of an exploration licence area is generally significantly smaller than the maximum size of a prospecting/reconnaissance licence area.
Alternatively, a mining law may limit the size of the area for a prospecting/reconnaissance licence area by charging annual maintenance fees per unit area that are relatively high or that increase in proportion to the size of the licenced area.
24.4 Example 1:
A prospecting/reconnaissance licence area shall not exceed ten thousand (10,000) square kilometres.
Drawn from Sierra Leone’s mining law (2009), this example sets a very large limit on the size of a reconnaissance licence area. The reconnaissance licence is non-exclusive under the mining law of Sierra Leone.
24.4 Example 2:
(1) The area of land in respect of which a reconnaissance licence may be granted shall be a block or any number not more than five thousand contiguous blocks each having a side in common with at least one other block the subject of the application.
(2) For purpose of this [Act][Code][Law], the surface of the Earth shall be deemed to be divided in accordance with the co-ordinates represented in the official maps of [Country] held at the [Regulating Authority] at a scale of 1:50,000,
(a) by the meridian of Greenwich and by meridians that are at a distance from that meridian of 15 or a multiple of 15 seconds of longitude,
(b) by the equator and by parallels of latitude that are at a distance from the equator of 15 or a multiple of 15 seconds of latitude, into sections (“geometric sections”) each of which is bounded,
(c) by portions of those 2 meridians that are at a distance from each other of 15 seconds of longitude, and
(d) by portions of 2 of those parallels of latitude that are at a distance from each other of 15 seconds of latitude.
(3) For purposes of this [Act][Code][Law]
(a) a geometric section that is wholly within [Country] constitutes a block and
(b) where only part of a geometric section is within [Country], that part constitutes a block.
Drawn from Ghana’s mining law (2006), the maximum area of a reconnaissance licence – which is exclusive under the Act (i.e. for the minerals to which the licence relates) – is defined in terms of blocks. The size of the blocks is in turn defined in the article of the law describing the Cadastral System for mining, by reference to the geographical projection to be used for identifying the borders of areas subject to mining rights. Thus, the area is a function of the defined cadastral grid system, which assures consistency among all licence areas.
Provisions that lay out, for the holder of a prospecting/reconnaissance licence, the necessary responsibility or duty to undertake certain actions, or restrictions from undertaking certain actions or causing certain effects, are collectively treated as obligations. Obligations may be addressed in a number of different ways: in articles specific to the prospecting/reconnaissance licence, in general provisions that apply to all licences, and sometimes in other miscellaneous parts of a mining law. Obligations to be considered include the following:
1) Central identification and registration of all prospecting/reconnaissance team members;
2) Notification of local authorities before entering or leaving a prospecting/reconnaissance area;
3) Stay out of areas subject to existing mining rights other than non-exclusive prospecting/reconnaissance areas;
4) Obtain consent of landowners and lawful users prior to entering land privately owned or subject to lawful customary usage;
5) Adhere to environmental guidelines or code of conduct, including site protection and restoration;
6) Not engage in trenching, drilling or other invasive exploration activities;
7) Declaration of samples to the Department of Geology as a condition for removing them from the site;
8) General obligation to report results to all relevant Government bodies;
9) Obtain authorization for the export of samples (that is, small rock samples chipped from outcroppings because no drill core or bulk sampling is authorized at this stage); and
10) Submission of a report of findings.
24.5 Example 1:
(1) A Prospecting/Reconnaissance Permit shall be granted subject to the covenants and conditions that the holder thereof shall-
(a) carry out prospecting/reconnaissance on a non-exclusive basis;
(b) not engage in drilling, excavation or other sub-surface techniques;
(c) submit information and such periodical reports as may be prescribed by the [Regulating Authority];
(d) conduct reconnaissance activities in an environmentally and socially responsible manner as may be prescribed by the [Regulating Authority]; and
(e) compensate users of land for damage to land and property; and pay the fees prescribed by regulation.
(2) The activities allowed under a Prospecting/Reconnaissance Permit together with corresponding environmental and social obligations shall be further specified in regulations.
(3) Prospecting/Reconnaissance activity authorised by a Prospecting/Reconnaissance Permit shall not constitute a land use right for the purposes, objectives, rents, fees and requirements of the [Land Use Act].
Drawn from Nigeria’s mining law (2007), this provision describes the obligations of the prospecting/reconnaissance permit holder. The article contemplates additional specifications in the regulation, contains a reporting requirement for licensees and prohibits any subsurface exploration, including drilling or excavation.
Paragraph 3 of the provision in the example essentially exempts the rights granted under the prospecting/reconnaissance licence from the requirements of the Land Use Act, because of the limited term and nature of the licence and the detailed provisions elsewhere in the mining law regarding notification, consent and compensation of land owners or lawful users in connection with licenced mineral activities. Those other detailed provisions on reconciling temporary access rights to land under a prospecting/reconnaissance licence with other existing and prospective lawful uses of the land are crucial to a successful outcome and the avoidance of conflict among competing land uses.
24.5 Example 2:
(1) No prospecting/reconnaissance licence shall authorise the holder of the licence to prospect over an area of land that is, or forms part of -
(a) An exploration area, a mining area, a retention area or a location licence area; or
(b) a forest reserve, game reserve, national park, or an urban centre, unless the holder of the prospecting/reconnaissance licence has first given notice to and obtained permission from the relevant authorities and complies with any conditions imposed by such authorities.
(2) Where it is necessary to fly over any land for the purpose of exercising any right under a prospecting/reconnaissance licence, nothing in this section shall prevent any such flight from being undertaken, provided it is in accordance with the provisions of [relevant section] (requiring compliance with other applicable laws) of this [Act][Code][Law].
(3) The holder of a prospecting/reconnaissance licence shall-
(a) subject to section (1) of this article, carry on prospecting/reconnaissance operations in accordance with the licence;
(b) submit to the [Regulating Authority] quarterly, or at such other intervals as may be prescribed, geological and financial reports and such other information as may be prescribed by regulation;
(c) report any mineral discovery to the [Regulating Authority]; and
(d) remove on or before the expiration of the prospecting/reconnaissance operations, any camps, temporary buildings or installations which may have been erected; and shall repair or make good any damage caused to the surface of the land to the satisfaction of the [Regulating Authority].
Drawn from Uganda’s mining law (2003), this example covers most of the requirements that would be considered best practice, particularly with respect to (a) areas that are off-limits and (b) site restoration.
Licensees are obligated to remove all equipment and structures used during the prospecting/reconnaissance operation and repair any damage to the surface.
The rights of a reconnaissance-type prospecting licence holder are generally limited to the right to conduct non-invasive prospecting/reconnaissance activities as defined, within the licenced area, on a non-exclusive basis, and to collect samples in small quantities for analysis. A clear definition of the scope of this reconnaissance-type of prospecting, and how it differs from exploration, is therefore essential. A prospecting/reconnaissance licence may include the right to conduct airborne geophysical surveys, as in Sierra Leone and Uganda. Because it is usually non-exclusive, this type of licence generally does not entitle the holder to a priority for obtaining an exploration licence. However, an exclusive prospecting/reconnaissance licence that does entitle the holder to such a priority is available under the mining laws of Ghana and Liberia, and constitutes a more valuable initial mineral right than the typical non-exclusive licence.
24.6 Example 1:
(1) Subject to this [Act][Code][Law] and the conditions of a reconnaissance licence granted under this [Act][Code][Law], the holder of a reconnaissance licence, his employees, servants or agents shall have the non-exclusive right to carry on reconnaissance operations in the reconnaissance area.
(2) For the purpose of exercising the right conferred under subsection (1), the holder of a reconnaissance licence may-
(a) enter on or fly over the reconnaissance area to carry on approved reconnaissance operations on a non-exclusive basis;
(b) take and remove specimens and samples from the reconnaissance area not exceeding such limit as is reasonably required for reconnaissance purposes;
(c) sell, with the prior written permission of the[Regulating Authority], mineral specimens and samples obtained from reconnaissance operations;
(d) subject to any law then in force, take timber and water from any lake or watercourse for the purposes of reconnaissance operations;
(e) erect camps and temporary buildings, including installations in any water forming part of the reconnaissance area provided that the erection of any camp or building under this paragraph shall not be construed as conferring any right, title or interest in the land;
(f) remove on or before the termination of the reconnaissance operations, any camps, temporary buildings or installations which the holder may have erected.
Drawn from Sierra Leone’s mining law (2009), this example is a fairly standard statement of the rights of prospecting/reconnaissance licence holders. The rights in this case are limited to superficial investigation and reasonable sampling without the use of drilling or other invasive techniques (based on the definition of reconnaissance in the mining law).
The rights are non-exclusive and do not convey any priority to obtain an exploration licence for the subsequent phase of mineral resource development activity.
24.6 Example 2:
(1) Subject to this [Act][Code][Law] and the Regulations made under this [Act][Code][Law], a prospecting/reconnaissance licence confers on the holder and a person authorized, in accordance with this [Act][Code][Law] by the holder of the prospecting/reconnaissance licence, the exclusive right to carry on reconnaissance in the reconnaissance area for the minerals to which the reconnaissance licence relates and to conduct other ancillary or incidental activity.
(2) For the purposes of exercising the right conferred under subsection (1), a holder of a prospecting/reconnaissance licence and a person authorized in accordance with this [Act][Code][Law] by the holder of the prospecting/reconnaissance licence, may enter the reconnaissance area and erect camps or temporary buildings, subject to compliance with the provisions of this [Act][Code][Law].
(3) A holder of a prospecting/reconnaissance licence shall not engage in drilling or excavation.
(4) If a holder of a prospecting/reconnaissance licence applies for an exploration licence over all or part of the land and for a mineral which is the subject of the prospecting/reconnaissance licence and the holder has materially complied with the obligations imposed by this [Act][Code][Law] with respect to
(a) the holding of the licence, and
(b) the activities to be conducted under the licence,
The [Regulating Authority] shall within sixty days of the application, subject to the permits and other obligations required by law having been complied with, grant the applicant the exploration licence on the conditions that shall be specified in the licence.
Drawn from Ghana’s mining law (2006), this example provides for the exclusive right to conduct reconnaissance with respect to specified minerals in the area that is covered by the licence. Drafters should consider clarifying whether the exclusivity conferred by the licence means (a) that no other mineral activity whatsoever by another person will be authorized within the licence area during the term of the licence or (b) no other mineral activity by another person with respect to the specified minerals will be authorized during the term of the licence, but mineral activity as to other minerals may be authorized.
This provision specifically empowers the licence holder to authorize another person to conduct the reconnaissance operations on behalf of the holder, provided the authorization is done in accordance with the mining law. Care should be taken in other articles to prescribe the qualifications of such third parties and the nature of their relationship with the licence holder.
The scope of the activity authorized by the prospecting/reconnaissance licence in the example – “reconnaissance ... and other ancillary or incidental activity” – is defined in the definition of “reconnaissance” in the “Interpretation” section of the mining law, which is the standard approach to drafting such provisions. The example adds the authorization to conduct ancillary and incidental activities to ensure inclusion of necessary related activities.
This provision includes one specific authorization as to land use and one specific prohibition as to drilling and excavation (for emphasis, even though those activities are excluded by the definition of reconnaissance). The land use authorization is typically qualified (in other articles) to require non-interference with existing land uses to the extent possible, consultation with other land users, and compensation for any damage or interference with other lawful uses of the land.
The provision in this example requires the Regulating Authority to grant the holder of a prospecting/reconnaissance licence an exploration licence if the holder has materially complied with the obligations under the Act. By granting the holder who is in compliance the right to obtain a licence for the subsequent phase of mineral resource development activity, this article provides security of tenure to the licence holder and thereby encourages investment in “greenfield” reconnaissance (for which the success rate is very low). The exclusive nature of the prospecting/reconnaissance licence and the security of tenure that it provides to the holder are considered by the mining industry to be valuable rights.
Not all mining laws provide for a prospecting/reconnaissance licence. However, among those that do, the terms of such licences vary from three months to two years.
In general, because the purpose of a prospecting/reconnaissance licence is to enable large scale but non-invasive investigation of an area’s mineralization that, if successful, leads to exploration work which usually involves extensive drilling, the terms of prospecting/reconnaissance licences are not long. Most mining laws that include separate licencing of reconnaissance activity provide a term of one year for the licences.
A few African countries (such as Ghana, Liberia, Madagascar and Namibia) grant prospecting/reconnaissance licences for periods of less than or up to a year. Under their Mining laws, the holder of a prospecting/reconnaissance licence has a right that is exclusive (or that may become exclusive, in the case of Namibia) and that has a priority for obtaining an exploration licence for the subsequent, more narrowly focused, phase of mineral resource development activity. In Madagascar, the term of an Exclusive Perimeter Reservation Authorization, under which reconnaissance activity is authorized, is limited to three months and is non-renewable.
24.7 Example 1:
A prospecting/reconnaissance licence shall be valid for a period not exceeding one year.
Drawn from Sierra Leone’s mining law (2009), this is a typical term for a non-exclusive prospecting/reconnaissance licence that confers no right or priority to obtain an exploration licence.
24.7 Example 2:
A prospecting/reconnaissance licence shall be valid for a period not exceeding one year.
A prospecting/reconnaissance licence shall be valid for a period not exceeding one year.
Drawn from Liberia’s mining law (2000), this provision provides a shorter term for an exclusive prospecting/reconnaissance right that includes the right to obtain an exploration licence for the subsequent phase of mineral resource development activity if the holder is in compliance with his/her/its obligations under the initial licence.
24.7 Example 3:
An Exclusive Permit to Reserve an Area confers on the holder an exclusive right to prospect and then, should the need arise, apply for a mining licence with a view to prospecting and/or carrying out mining operations, for one or more zones within the area covered by the permit.
Drawn from Madagascar’s mining law (2005), this example provides for an AERP – which is an exclusive prospecting/reconnaissance licence with an exclusive right to apply for an exploration or exploitation licence during the term of the AERP – with a very short term of 3 months. Reconnaissance-type prospecting activities are authorized under the AERP. The purpose of this licence is primarily to enable prospective applicants to reserve an area while conducting due diligence on it, contacting the local authorities, initiating an environmental impact assessment and assembling an application for an exploration licence or a small scale mining licence (as spelled out in other omitted paragraphs of the article in the mining law of Madagascar).
To avoid abuses, this provision forbids renewals of AERPs and further restricts any applicant from obtaining a new AERP on any part of the surface area covered by the initial AERP for three years after it expires.
The short term of the AERP is thus inversely proportional to the robustness of the exclusive rights conferred. Because the AERP provides a very strong exclusive right, its term is kept very short in order to avoid tying up excessive areas of land that are not being explored.
Addressed often at the same time as the term of licence, renewal determines when, for how long, and how many times a licence holder may extend the duration of the prospecting/reconnaissance licence. Among African mining laws that provide for prospecting/reconnaissance licences, some provide that they are not renewable, others provide that they are renewable or extendable only once for a period equal to that of the initial term, and a couple of mining laws provide that they are renewable indefinitely.
If the prospecting/reconnaissance licence provides an exclusive right to conduct mineral resource development activities in a specific area and includes the exclusive right to apply for an exploration licence and to obtain such licence if in compliance with all requirements of the prospecting/reconnaissance licence, then renewals tend to be, and should be, kept to a minimum in order to avoid tying up vast areas of land for limited, non-invasive preliminary investigations that should be accomplished within a short period of time.
In cases where the prospecting/reconnaissance licence is non-exclusive and includes no right or priority to obtain an exploration licence for the next phase of mineral resource development activity, there is no risk that its existence will freeze any areas of land from further mineral resource development activities. In such cases, a more liberal rule on renewals may be appropriate.
24.8 Example 1:
(1) Subject to subsection (2), a reconnaissance licence may be extended once only and for a period not exceeding twelve months.
(2) Where, at least one month before the end of the extended period, or within the shorter period that the [Regulating Authority] may allow, the holder of a reconnaissance licence satisfies the [Regulating Authority] that delay by a government institution in the issuance of a permit or in carrying out a lawful activity has resulted in delay by the holder in the discharge of an obligation under the reconnaissance licence, the holder may apply in writing to the [Regulating Authority] for extension and the [Regulating Authority] may extend the term of the reconnaissance licence for a period not more than twelve months.
Drawn from Ghana’s Mining law (2006), this article provides for one extension of the term of an exclusive reconnaissance licence for up to a year, and a conditional further extension up to a year if the condition is met. As noted above, Ghana seeks to encourage investment in greenfield investigation by granting the reconnaissance licence holder an exclusive right to obtain an exploration licence over all or part of the reconnaissance area if the holder is in compliance with the requirements of the licence.
24.8 Example 2:
The reconnaissance permission is valid for two years and is not renewable.
Drawn from South Africa’s mining law (2002), this provision grants a relatively long initial term for the prospecting/reconnaissance licence that is non-exclusive and includes no priority or right to an exploration licence. The initial term in this example is equivalent to the usual one-year initial term and one-year renewal term found in other mining laws. Since the licence is not exclusive, its existence does not prevent the grant of another licence over the same area, nor should it inhibit other land uses in the area. Therefore, the longer initial term is benign.
When the Regulating Authority temporarily prohibits operations under a prospecting/reconnaissance licence, due to the licence holder’s failure to meet certain obligations or external circumstances that create dangerous conditions (e.g. conflict), this is referred to as suspension of the prospecting/reconnaissance licence. Suspension provisions should address the grounds for and length of the suspension, the authority empowered to order a suspension, what the licence holder must do in order to have the suspension lifted, and the related notification procedures. The suspension provisions may also specify whether time lost will be added to the duration of the licence term once the suspension is lifted. Suspension is a temporary sanction that can be removed once remediation or correction of the ground for the suspension has occurred; whereas revocation of the licence is a final sanction that terminates the rights of the licence holder definitively.
24.9 Example 1:
(1) The [Regulating Authority], or any person authorised by the [Regulating Authority], may, in writing, order reconnaissance, exploration or mining operations to be temporarily suspended on an emergency basis, regardless of whether such operations are authorized by a mineral right, until such arrangements are made that are in the Regulating Authority’s opinion necessary to prevent danger to life, property or the environment or to comply with this [Act][Code][Law].
(2) The [Regulating Authority] may cancel or vary the terms of any temporary suspension order.
(3) The [Administrative Reviewer] shall have the power to confirm a temporary suspension order made by the [Regulating Authority] and may not delegate this power.
(4) A temporary suspension order shall lapse after twenty one days of its issuance, unless it is confirmed, in writing, by the [Administrative Reviewer].
(5) The [Administrative Reviewer] after consultation with the [Regulating Authority] may suspend a mineral right if the holder-
(a)fails to make any of the payments required by or under this [Act][Code][Law] on the date due;
(b)fails to meet any prescribed minimum annual programme of work or work expenditure requirement;
(c)grossly violates health and safety regulations or causes environmental harm;
(d)employs or makes use of child labourers;
(e)fails to submit reports required by this [Act][Code][Law];
(f)contravenes any of the provisions of this [Act][Code][Law] or the conditions of his mineral right or the provisions of any other enactment relating to mines and minerals;
(g)dies and his heir or successor in title is not qualified under this A[Act][Code][Law] to hold the mineral right, unless an application is received from the heir or successor within ninety days of the death to transfer the right to a third party who is so qualified and accepts all duties under the right;
(h)becomes an un-discharged bankrupt or becomes of unsound mind;
(i)makes any statement to the [Regulating Authority] in connection with his mineral right which he knows or ought to have known to be false;
(j)fails to substantially comply with the terms of a community development agreement when required by this [Act][Code][Law] to do so;
(k)for any reason becomes ineligible to apply for a mineral right under section [_] (listing the grounds for ineligibility).
(6) The [Administrative Reviewer] shall, before suspending any mineral right, give notice to the holder in such a manner as shall be prescribed and shall, in such a notice require the holder to remedy in not less than thirty calendar days any breach of the conditions of his mineral right.(7) If the holder of a mineral right fails to remedy any failure or contravention specified in paragraphs (c), (d) and (k) of subsection (1), the [Administrative Reviewer] may, by notice to the holder thereof, suspend the mineral right forthwith.
Drawn from Sierra Leone’s mining law (2009), this example provides for both (a) temporary suspensions of operations on an emergency basis for 21 days by the Regulating Authority and (b) a longer term suspension of mining rights on the non-compliance grounds stated in subsection 5 by the Administrative Reviewer, after consultation with the Advisory Board. The “Administrative Reviewer” as used in this example is the administrative authority that is the immediate superior of the Regulatory Authority in the administrative hierarchy. The provision in the example also gives the Administrative Reviewer the power to extend a temporary suspension by confirming it in writing.
In the case of a long-term suspension, the mining rights holder is provided with notice and an opportunity to cure the breach of obligation within thirty days before the suspension takes effect. The suspension may be the precursor to cancellation of the mineral right if the reason for the suspension is not corrected on a timely basis.
24.9 Example 2:
(1) Without prejudice to any other provisions of this [Act][Code][Law], upon the written approval of the [Regulating Authority], the Mining Cadastre Office may suspend a mining right for a period not exceeding sixty days if the holder-
(a)fails to make any payments required by or under this [Act][Code][Law] on the due date; or
(b)has breached any condition of the mining right;
(c)has contravened any provisions of this [Act][Code][Law];
(d)has failed to comply with any lawful order given In connection with his operations;
(e)makes any statement to the Mining Cadastre Office which he knows or ought to have known to be false; or
(f) for any reason becomes ineligible to apply for a mining right under the provisions of this [Act][Code][Law].
(2) A mining right shall only be suspended after thirty days’ notice of the intention to suspend the mining right containing in detail the grounds thereof is given to the holder and during the period fixed the holder has failed to remedy the breach or remove the grounds for suspension within the required period.
Drawn from Nigeria’s mining law (2007), this example provides the grounds for suspension of mining rights which apply to reconnaissance permits because they are mining rights under the law. The mining law contains additional provisions on the suspension of certain mineral rights that do not apply to prospecting/reconnaissance licences.
Like the provision in the Sierra Leone law, this provision requires notice to the licence holder and an opportunity to cure the breach before the decision on suspension is taken. Only if the holder fails to take the necessary remedial action within the thirty day notice period is the licence suspended. In this example, the notice must be given by the Mining Cadastre; and the length of the suspension period is set in the law as 60 days in all of the cases listed.
Failure to remedy the ground for the suspension during the suspension period may lead to revocation of the licence.
Typically, the reconnaissance-type prospecting licence is subject to the general provisions of the mining law on termination of mining rights, rather than provisions specific to that type of mineral right. The mining law should state clearly in one place the various ways in which a mining right can come to an end, which usually include expiration of the term, surrender by the holder, and revocation by the issuing authority. The law should make clear what the status of the licenced area is upon termination in each manner and any remaining potential liabilities or incapacities that the licence holder may have upon termination.
24.10 Example 1:
(1) [A mineral right shall be deemed terminated upon (a) the expiry of the licence (b) surrender of the licence by the licence holder pursuant to Section/Article [Surrender section/article of the Law] or (c) revocation of the licence by the [Regulating Authority] pursuant to Section/Article [Revocation section/article of the Law]].
(2) On the termination of a mineral right, the former holder shall deliver to the [Regulating Authority] or as the [Regulating Authority] directs,
(a) the records which the holder is obliged under this [Act][Code][Law] or regulations made under this [Act][Code][Law] to maintain,,
(b) the plans and maps covered by the mineral right prepared by the holder or at the holder’s instructions, and
(c) other documents, including in electronic format, if available, that relate to the mineral right.
(3) A person who fails to deliver, within thirty days from the date of being called upon to do so by the [Regulating Authority], a document which is required to be delivered under subsection (1) commits an offence and is liable on summary conviction to a fine not more than the cedi equivalent of US$ ten thousand or imprisonment for a term not more than three years or to both.
Drawn from Uganda’s mining law (2003) and Ghana’s mining law (2006), this example specifies the three ways in which a mineral right, including a prospecting/reconnaissance licence, can terminate. It further provides that the holder is required to deliver all records, maps and other documents relating to the mineral right upon termination. Failure to comply is an offense punishable by the fine or prison term indicated.
24.10 Example 2:
A prospecting permit shall expire when the specified period ends, if the holder surrenders the permit, or if it is cancelled by [the regulatory authority] for non-compliance with the obligations by which the permit-holder is bound for the reasons listed in Article [_] (on the grounds for the cancellation of mining titles) of the present mining [Code][Act][Law].
Drawn from Mali’s mining law (2012), this provision simply identifies the events that result in the termination of the prospecting/reconnaissance licence (term expiration, surrender or cancelation) and refers back to the article of the law that lists the grounds for cancelation of all mineral rights, including prospecting/reconnaissance licences.
A provision authorizing the Regulatory Authority to put an end to the validity of a prospecting/reconnaissance licence before the end of its term is referred to as the revocation of the licence. In some mining laws it is called withdrawal, cancellation or nullification of the licence. Whereas suspension of the licence is a condition that can be cured, revocation of the licence is final. Moreover, many mining laws provide that a person whose mineral licence has been revoked is ineligible to receive any new mineral licence for several years after the revocation. Because of the seriousness of the revocation sanction, it should be subject to certain procedural due process safeguards including notification to the licence holder of the grounds for the revocation and an opportunity to cure the problem, if feasible, or to present arguments and evidence that a failure or violation constituting grounds for revocation of the licence has not in fact occurred or should be excused.
As noted above with respect to suspension, prospecting/reconnaissance licences tend to be subject to general provisions on revocation rather than provisions specific to that type of licence in particular. Where revocation provisions are deemed necessary for a prospecting/reconnaissance licence, the mining law should clearly spell out the grounds for revocation and the steps that occur before revocation is final, including notice and an opportunity to cure the problem, as well as identify a transparent process through which the licence holder may contest the revocation.
Other issues to be given careful consideration in drafting clauses on revocation of mining rights are:
1) Whether revocation of the reconnaissance/prospecting licence should be automatic in certain circumstances and, if so, in what circumstances;
2) Whether revocation of the licence should always be preceded by an order of suspension of the licence and an opportunity for the holder to cure the problem that provides the grounds for revocation; and
3) Whether the Regulating Authority should have discretion to revoke the licence or not, in all or certain circumstances.
As a general matter, if the prospecting/reconnaissance licence is exclusive and gives the holder an exclusive right or priority to apply for an exploration licence in the licence area, then it constitutes a robust and valuable right under which the licence holder is likely to make a substantial investment in reconnaissance work. In such cases, stronger procedural safeguards would be appropriate.
Conversely, if the prospecting/reconnaissance licence is non-exclusive and does not provide an exclusive or priority right to apply for an exploration licence in the licenced area, then it constitutes a less robust and valuable right under which the licence holder is less likely to make a substantial investment in reconnaissance work. In such cases, fewer procedural safeguards may be appropriate.
24.11 Example 1:
(1) The [Regulating Authority] may revoke any mining right if-
(a) the holder is convicted by any court of competent jurisdiction for an offence under this [Act][Code][Law] or its Regulations and the time for appealing against the conviction, if any, has lapsed or the appeal has been dismissed or withdrawn or struck out for want of prosecution;
(b) the holder breaches any provision of this [Act][Code][Law] or regulations made or of any terms or conditions of his mining right whether express or implied;
(c) the holder breaches any order or notice issued or given under this [Act][Code][Law] or Regulations made under it, or on being required by the [Regulating Authority] by notice to show cause within a time specified in the notice why the mining right should not be revoked, the holder fails to comply or show adequate cause;
(d) the holder is declared by a court of competent jurisdiction to be insolvent or bankrupt or goes into insolvent liquidation, except as part of a scheme for reorganisation, amalgamation or an arrangement with its creditors; or
(e) the mining right is held jointly by more than one person and the provisions of subsection (1) (a) of this section apply to any one of the joint holders unless the other joint holders are able to assume the obligations of the former and adopt measures which will guarantee the performance of these obligations.
(2) A mining right shall be revoked upon written advice of the [Regulating Authority] only after thirty days’ notice of the intention to revoke the mining right containing in detail the grounds thereof is given to the holder and during the period fixed the holder has failed to remedy the breach or remove the grounds for revocation within the required period.
(3) Any notice issued by the [Regulating Authority] and sent by registered mail to the last known address in [Country] or given in person to an authorised representative of the mining right holder in [Country] or published in the [Gazette], shall for all purposes be sufficient notice of the revocation of the mining right to the mining right holder.
Drawn from Nigeria’s mining law (2007), this article details – in a general article on revocation of all mineral licences - the grounds for revocation of a prospecting/reconnaissance licence. The licence is non-exclusive under the mining law of Nigeria. The provision includes the following safeguards:
- The grounds for revocation are specified;
- Notice of the ground for revocation of a holder’s licence must be provided to the holder in writing, in one of three specified ways; and
- The holder is given thirty days to remedy the breach or remove the grounds for revocation.
24.11 Example 2:
(1) The [Regulating Authority] on the recommendation of the [Administrative Reviewer] may cancel a mineral right if the holder,
(a) fails to make payment on the due date, whether due to the [State] or another person, required by or under this [Act][Code][Law],
(b) becomes insolvent or bankrupt, enters into an agreement or scheme of composition with the holder’s creditors, or takes advantage of an enactment for the benefit of its debtors or goes into liquidation, except as part of a scheme for an arrangement or amalgamation,
(c) makes a statement to the [Regulating Authority] in connection with the mineral right which the holder knows or ought to have known to be materially false, or
(d) for any reason, becomes ineligible to apply for a mineral right under this [Act][Code][Law].
(2) The [Regulating Authority] shall, before cancelling a mineral right under subsection (1), give notice to the holder and shall in the notice, require the holder to remedy a breach of the condition of the mineral right within a reasonable period, being not less than sixty days in the case of a prospecting/reconnaissance right and if the breach cannot be remedied, to show cause to the reasonable satisfaction of the [Regulating Authority] why the prospecting/reconnaissance right should not be cancelled.
(3) On cancellation of a mineral right under this section, the right of the holder shall cease but without prejudice to the liabilities or obligations incurred by another person in relation to the mineral right prior to the date of the cancellation.
Drawn from the mining law of Ghana (2006), this provision governs the revocation of an exclusive prospecting/reconnaissance licence. It includes the following safeguards:
- The Regulating Authority is only authorized to revoke a licence on the recommendation of the Minerals Commission;
- The grounds for revocation are specified in the mining law and are more limited than in the first example (i.e., a breach of any term of the mining law is not a ground for revocation of the licence under the Ghanaian mining law); and
- The Regulating Authority must give prior notice to the holder,
- The holder is given a sixty day period to cure the breach or explain why the licence should not be revoked.
These safeguards are stronger than those for non-exclusive rights under the first example in that a recommendation of the Commission is required in order for the Regulating Authority to revoke, the grounds for revocation are much more limited, and the holder is given a longer cure period.
As in the first example, the Regulating Authority is given the flexibility to revoke or not, based on the circumstances and the reasoning provided by the licence holder.
Surrender provisions address instances where the licence holder gives up the mining right voluntarily before the duration of the licence has run out. As noted above with respect to suspension and revocation, prospecting/reconnaissance licences tend to be subject to general provisions on surrender rather than provisions specific to the prospecting/reconnaissance licence itself.
The mining law should clearly spell out the steps that must occur before surrender of the mining licence is recognized by the Regulating Authority.
24.12 Example 1:
(1) The holder of a mining right may, upon application in the form and manner prescribed in the Regulation, and upon meeting the conditions prescribed therein, surrender the mining right.
(2) The Mining Cadastre Office shall approve an application made under subsection (1) of this section to surrender the mining right if it is satisfied that-
(a) the holder of the mining right has submitted the request for surrender in the prescribed form and manner;
(b) the surrender will not affect any liability incurred by the mining right holder before the surrender of the mining right, including environmental obligation;
(c) all rents due and fees prescribed, if any, have been paid by the holder of the mining right; and
(d) the holder of the mining right has surrendered the original title document.
Drawn from Nigeria’s mining law (2007), this example of a surrender provision establishes the right of the licence holder to surrender the mineral licence provided that certain conditions are met. Most importantly, the conditions require a finding that the surrender will not affect any liability of the licence holder, including environmental obligations, and that the holder of the licence has paid all fees and rents due. The provision applies to all mining rights (the language is not specific to prospecting/reconnaissance licences.)
24.12 Example 2:
(1) The holder of a mineral licence may surrender the reconnaissance area, prospecting area, retention area or mining area to which such licence relates by notice in writing addressed and delivered to the [Regulating Authority] and shall together with such notice return such mineral licence, whereupon –
(a) the [Regulating Authority] shall -
(i) cancel such mineral licence;
(ii) make an entry to that effect in the register of mineral licences referred to in
article [_] (on the register of mineral licences);
(iii) notify the person who was the holder of such mineral licence that such mineral
licence has been cancelled; and
(iv) notify the owner of the land on which such area was situated of such
(b) such area shall be deemed to have been surrendered on the date on which such mineral licence has been cancelled as provided in subparagraph (i) of paragraph (a).
(2) If a reconnaissance area, prospecting area, retention area or mining area is surrendered as provided in subsection (1), the holder of the mineral licence to which such area relates shall –
(a) demolish any accessory works erected or constructed by such person in such area, except in so far as the owner of the land retains such accessory, works on such conditions as may mutually be agreed upon between such owner and person, and remove from such land all debris and any other object brought onto such land;
(b) take all such steps as may be necessary to remedy to the reasonable satisfaction of the [Administrative Reviewer] any damage caused by any reconnaissance or prospecting operations and mining operations carried on by such holder to the surface of, and the environment on, the land in the area in question.
(3) The surrender of a reconnaissance area, prospecting area, retention area or mining area shall not affect any legal proceedings instituted against such holder or any obligation or liability of such holder in terms of the provisions of this [Act][Code][Law].
(4) Any person who contravenes or fails to comply with the provisions of subsection (2) shall be guilty of' an offence and on conviction be liable to a fine not exceeding [Maximum Penalty Amount] or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.
Drawn from Namibia’s mining law (1992), this example takes a different approach to surrender of the prospecting/reconnaissance licence. In contrast to the Nigerian example, which makes the administrative acceptance of a surrender subject to the fulfilment of certain conditions, this example makes surrender automatic upon the submission of a written request by the holder, together with the mineral licence. The Regulating Authority is required to enter the surrender in the register of mineral licences, to notify the surrendering licence holder of the cancellation of the licence and to notify the owner of the land covered by the surrendered licence.
Instead of imposing conditions precedent for recognition of a surrender of the licence (which is called “abandonment” in the Namibian mining law), this example imposes obligations on the surrendering licence holder after the cancellation of the licence. These obligations include:
- Demolition and removal of any works erected on the prospecting/reconnaissance area, unless otherwise agreed with the landowner.
- Remediation of any damage caused to the surface land and the environment, to the reasonable satisfaction of the Administrative Reviewer. The “Administrative Reviewer” as used in this example is the administrative authority that is the immediate superior of the Regulatory Authority in the administrative hierarchy.
Failure to comply with these post-surrender obligations is punished by a fine and/or prison term.
Whereas the surrender of the mineral licence is effective as of the date of cancellation by the Regulating Authority, the surrendering holder must retain whatever access rights have been secured with the owners of the land covered by the surrendered licence in order to accomplish the holder’s post-surrender obligations.
Like the previous example, this example stipulates that the surrender shall not affect any liability or obligation under the mining law, or any legal proceeding against the surrendering holder.
The advantage of this approach is that it speeds the process of making surrendered licence areas available to another applicant. The disadvantage is that enforcement of the post-surrender obligations may be problematic.
Transfer and assignment of rights often addresses whether a prospecting/reconnaissance licence holder may hand over, sell, rent either part or the whole of their licence to another person or entity or in any way encumber or place a lien on the licence for the benefit of such other person or entity. Reconnaissance-type prospecting licences that are non-exclusive, even in jurisdictions where they constitute mining rights, are typically non-transferrable. Since such rights are non-exclusive, any eligible person can simply apply directly for a prospecting/reconnaissance licence of their own over the same area, so there is no real need for transfers of such rights. In the relatively rare case where reconnaissance-type prospecting licences are exclusive, they tend to be transferable.
24.13 Example 1:
A prospecting/reconnaissance licence is not transferable.
Drawn from Sierra Leon’s mining law (2009), a non-exclusive prospecting/reconnaissance licence is not transferable. This is a typical provision. Because a non-exclusive prospecting/reconnaissance licence over the same area is available from the Regulating Authority, there is no need for transferability.
24.13 Example 2:
(1) A prospecting right or reconnaissance permit confers on the holder an exclusive right to carry out prospecting and reconnaissance investigations for minerals belonging to the group for which said permit was issued, within the boundaries of the holder's area and with no limit as to depth.
(2) A prospecting right or reconnaissance permit is a movable indivisible right that may not be subleased. It may be assigned or transferred. To this end, a rights holder must send [the regulatory authority] any contract or agreement through which it purports confer, assign or transfer the rights and obligations arising from the prospecting permit to a third party.
The assignment or transfer of a prospecting right may only occur under the same conditions which applied for the allocation of the right and shall be subject to the assignor providing [the regulatory authority] with a report on the work carried out in accordance with the Establishment Convention. The assignment or transfer shall take effect only when the order from [the regulatory authority] comes into operation.
The assignee or heir must apply for the permit within thirty (30) days from the signing of the deed of assignment or the legal instrument in which the heirs were designated, which must have been finalised subject to the condition precedent of regulatory authority approval. The terms for assignment and transfer shall be specified in the implementing decree from the regulatory authority.
Drawn from Mali’s mining law (2012), this provision states that the exclusive prospecting/reconnaissance licence is transferable. As noted above, an exclusive prospecting/reconnaissance licence is more valuable to an investor and is more likely to have given rise to significant investment than a non-exclusive licence. In order to attract junior companies that focus on early stage reconnaissance and prospecting before selling their assets to a larger mining company, this provision grants a robust prospecting/reconnaissance right that promotes investment in previously unexplored or underexplored areas.
Reconnaissance-type prospecting licences and their holders can be subject to applicable general violations and penalties, and may also be subject to specific violations and penalties as deemed appropriate. Specific violations usually consist of engaging in prospecting/reconnaissance activities outside of the licenced area, engaging in exploration or exploitation activities not authorized by the prospecting/reconnaissance licence, and unauthorized removal or sale of minerals from the licence area. It is essential that the reconnaissance-type prospecting activity authorized by the licence be carefully defined to distinguish it from exploration under an exploration licence.
24.14 Example 1:
(1) The following offences shall be subject to a fine of [amount] to [amount] and a prison sentence of between eleven days and two years, or only one of these two penalties:
(a) those who analyse samples outside of the [Country] without prior authorisation from the Mining Division.
(1) The following offences shall be subject to a fine of [amount] to [amount] and a prison sentence of between one month and three years, or only one of these two penalties:
(a) conducting mining or prospecting activities in the absence of an appropriate mining right;
(b) those who, within the meaning of the provisions of the Criminal Code, provide aid or assistance to illegal prospectors or operators.
(2) In addition, mineral substances which are extracted illegally, as well as the means, items and instruments which contributed to offences 1) and 2) above shall be seized by and forfeited to the State.
(3) Those who have not carried out the work in accordance with Article [_] (on measures relating to preserving public health and safety, and those relating to respecting the features of the surrounding environment) above before the relevant mining right comes to an end; and
(4) Holders of mining rights who do not, within the prescribed time periods, comply with the instructions of the [the regulatory authority] relating to the measures provided for in Article [_] (on obligations relating to public health and safety, nature conservation, and the preservation of transportation routes, the sturdiness of buildings, and the use, output or quality of water of any kind) above.
Drawn from Mali’s mining law (2012), these provisions include violations and penalties that would be specific to reconnaissance-type prospecting, although not necessarily exclusive to that type of activity:
- sending samples for analysis outside of Mali without authorization from the Department of Mines ;
- engaging in exploration or exploitation of mineral substances without the proper title;
- assisting clandestine prospectors or miners;
- failure to implement the approved protective measures prior to site closure; and
- failure to implement required measures for safety, pollution control, environmental protection, protection of communication lines, structural stability, and water usage, flow and quality.
The penalties include fines and imprisonment, as well as confiscation of illegally extracted minerals and the means, instruments and things used to extract them.
24.14 Example 2:
Any person who intentionally or negligently transgresses the boundaries of his or her reconnaissance area, prospecting area, claim area, retention area or mining area while carrying on reconnaissance operations, prospecting operations or mining operations or such boundaries to be so transgressed shall be guilty of an offence and on conviction be liable to a fine not exceeding [Maximum Penalty Amount] or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.
Drawn from Namibia’s mining law (1992), this example presents an additional specific violation applicable to reconnaissance-type prospecting licences – namely, conducting operations outside of the licenced area - that may be found within a general article on miscellaneous violations.
Exploration – also called “prospecting” in many Anglophone African jurisdictions (e.g., Botswana, Ghana, Namibia, South Africa, Tanzania, Zambia, Zimbabwe) and “recherche” in Francophone jurisdictions - is the systematic investigation of the surface and subsurface of the Earth in a designated area using geological, geophysical and geochemical methods for the purpose of determining the presence of economic deposits of mineral substances and establishing their nature, chemical composition, shape, grade and estimated quantity within degrees of certainty according to industry norms, as well as the most effective, efficient and appropriate means of extracting, processing and marketing the mineral products derived from the deposits under forecasted conditions of price and cost (including fiscal terms). Exploration can be conducted by the state or an investor.
Exploration activity proceeds in stages. The results of each stage are evaluated by the explorer and a determination is made to either proceed to the next stage, sell the exploration rights where possible, or abandon the project and relinquish the rights. The first stage of exploration in a geographical area that has not been the subject of extensive prior exploration or mining activity typically commences with wide scale, superficial investigation using primarily geological and geophysical methods. This is the least costly stage of exploration activity.
If the results of that activity are sufficiently promising and the explorer is willing and able, then the second stage of exploration work will typically involve progressively more narrowly targeted investigation of the type, quality, extent and quantity of concentrated mineralization in a specific area by means of drilling and the analysis of core samples taken at various depths from selected points on a grid laid over the targeted surface area, and the completion of at least a preliminary reserve study to quantify the volume of mineralization identified or projected based on the drilling and analysis in accordance with industry norms as to degree of certainty. The second stage of activity may be the first stage of exploration activity in an area that has previously been extensively explored or mined and for which substantial data is available for analysis.
If the results of the drill core analysis and preliminary reserve study are determined to justify a significant investment in evaluating the commercial feasibility of exploiting the identified deposit, the third and most expensive stage of exploration activity will involve conducting the final mineral reserve studies (if one has not already been completed), prefeasibility studies, environmental and social impact assessments and final feasibility studies with the goal of establishing the economic justification for developing the identified deposits.
In some jurisdictions, an exploration licence may be, or must be, preceded by a prospecting/reconnaissance licence as described in the previous part of this Guiding Template (Part B-1). In those jurisdictions, the main difference between prospecting/reconnaissance activity and exploration (or “prospecting”) activity is that the former is limited to the types of activity common to the first stage of “greenfield” exploration, whereas the latter includes drilling, analysis of drill core samples of ore and the conduct of in-depth studies to determine the presence of a commercial deposit of valuable mineral substances.
In other jurisdictions, the activity described under prospecting/reconnaissance licences in Part B-1 of this Guiding Template is considered part of exploration and there is no separate licensing of prospecting/reconnaissance activity.Thus, depending on the jurisdiction, an exploration licence may be the right or title that authorizes (a) initial activity to locate and evaluate concentrations of valuable minerals in nature, and/or (b) the second stage of exploration activity following the completion of an initial stage of such activity pursuant to a prospecting/reconnaissance licence. Overall, it is essential for “exploration” (or “prospecting” or “recherche”) to be defined or described in the “definitions” and “types of mineral rights” sections of a mining law to avoid confusion.
A mining law may restrict what legal entities can receive a permit or authorization to conduct exploration activities, either by defining who may or may not apply for the right, or by defining prior conditions that must be met before such an entity can be considered eligible to apply.
Eligibility conditions are key in determining the ease or difficulty of access to a nation’s mineral resources.
Issues to be considered include:
- Whether individuals and legal entities are eligible for exploration rights?
- Whether foreign individuals or entities are eligible, and under what conditions? (When distinguishing between foreign and national entities, mining legislation should define what is meant by a foreign entity.)
- Whether and what financial and/or technical capacity is required?
- Which individuals and entities are not eligible for exploration rights?
The eligibility requirements will determine not only who may obtain an exploration licence directly, but also to whom such a licence may be transferred in the future.
25.1 Example 1:
Article [_]. Eligibility for mining and quarrying rights
(1) Subject to the provisions of Article [_] below (on persons who are not eligible), the following shall be eligible for mining and quarrying rights:
(a) any natural person who is of age and is a Congolese national as well as any legal entity under Congolese law which has its registered office and its administrative office within the National Territory and whose objects are mining activities;
(b) any natural person who is of age and is a foreign national as well as any legal entity under the law of a foreign country;
(c) any scientific body.
(2) Eligible persons referred to in (1) (b) above shall be required to elect a domicile with a representative in the mining and quarrying industry which is set up within the National Territory and to act through their intermediary.
(3) Legal entities incorporated in foreign countries and the scientific bodies cited in 1 (b) and (c) above shall only be eligible for mining and quarry prospecting rights.
Article [_]. Electing a domicile
(1) Electing the domicile referred to in the preceeding Article is to be done intentionally and may only be done in writing.
(2) All service of documents, claims and actions for the performance of an act for which the domicile was elected, may be validly done at this domicile.
Article [_] Agents in the mining and quarrying industries
(1) Agents in the mining and quarrying industries require prior approval from [the regulatory authority] as regards their respectability, ethics, skills and in-depth knowledge of mining legislation, or of the management of the mining and quarrying field.
(2) In addition to representation, part of the role of agents in the mining and quarrying industries is to advise and/or assist any interested person in the granting and exercising of mining and quarrying rights as well as in disputes relating thereto.
(3) [The regulatory authority] shall maintain and publish the list of approved agents and shall update said list on an annual basis.
(4) The Mining Regulations shall lay down the conditions for approving agents in the mining and quarrying industries.
Article [_] Persons who are not eligible
(1) The following are not eligible to apply for and obtain mining and/or quarrying rights, an artisanal miner's card or a merchant's card, as well as authorisation to purchase and sell mineral substances from artisanal operations:
(a) State officials and civil servants, judges, members of the Armed Forces, the Police and Security Services, the employees of public bodies which are authorised to carry out mining operations;
(b) any person who lacks legal capacity, as provided for in Article [_] of the [Family Code];
(c) any person who has been prohibited therefrom including:
(i) a person who has been convicted, by a final judgement, for violating mining and quarrying legislation or legislation relating to economic activities as regards their mining and quarrying rights and affiliates, and they shall have been prohibited from so acting for a period of 10 years;
(ii) a person whose artisanal miner's or merchant's card has been withdrawn, and prohibited from obtaining such a license for a period of three years;
(iii) a person whose authorisation to purchase and sell mineral substances from artisanal operators has been withdrawn, and purchases/sales prohibited for a period of five years;
Drawn from DRC’s mining law (2002), these provisions contain specific eligibility requirements for individuals and corporate entities, national and foreign, as well as circumstances that render certain types of individuals and entities ineligible to hold mining and quarrying rights. The eligibility provisions are broken up into four articles, for clarity. They cover, respectively: (1) the general rule of eligibility, (2) the local domicile requirement for foreign nationals and entities, (3) the accreditation and role of mining and quarrying representatives, and (4) the general rule of ineligibility.
The first article establishes who is eligible for what types of licences (unless declared ineligible by the subsequent article on ineligibility). It makes a distinction between (a) citizens of the DRC and companies organized as mining companies under the laws of the DRC that have their official headquarters and principal administrative office in the DRC, on the one hand, and (b) foreign citizens and companies organized under foreign laws, and (c) scientific organizations, on the other hand. Foreign citizens and companies, as well as scientific organizations, are eligible only for exploration licences for mines and quarries. They are not eligible for exploitation licences.
Foreign citizens and companies are required to make an election of domicile in care of a mining and quarrying representative based in the National Territory and to act through such representative. This requirement is intended to assure the administration that they will be able to serve all legal notices for the foreign citizen or company on a known local entity. It will also serve to establish a tax domicile of the foreign nationals and entities in the DRC.
The second article provides that the election of domicile required of foreign citizens and companies must be made in writing; and that any notification, request or legal process concerning anything for which such election of domicile has been made is valid if delivered to that address.
The third article describes the role and control of the mining and quarrying representatives. They must be accredited by the Regulating Authority based on the criteria of honor, ethics, competency and deep knowledge of the mining legislation or the administration of matters relating to mines and quarries. In addition to their role of representation, the mining and quarrying representatives are authorized to advise and/or assist any person or entity interested in the issuance and the exercise of mining and quarrying rights, as well as related dispute resolution. The conditions for accreditation of mining and quarrying representatives are to be set forth in the Mining Regulation; and the Regulating Authority is to maintain and publish the list of accredited mining and quarrying representatives and update it annually. This provision, in effect, creates a new profession – that of mining and quarrying representative – in the interest of establishing a high standard of competency and professionalism in the representation of mining companies before the administrative authorities and dispute resolution bodies.
The fourth article describes the categories of persons who are not eligible to receive mineral rights. They include: (a) the listed categories of public servants, (b) persons lacking legal capacity under the applicable legislation (in this case the Family Code), and (c) persons subject to a prohibition. The latter category includes persons convicted of a criminal violation of the mining law (prohibited for 10 years), persons from whom an artisanal mining or trading permit has been withdrawn (prohibited for three years) and persons whose authorization to operate a trading post for artisanal mining products has been withdrawn (prohibited for five years).
25.1 Example 2:
Article [_] Eligibility for exploration licence.
A person shall not be eligible to apply for the grant of an exploration licence under this [Act][Code][Law] unless that person is a company incorporated or registered under the [Companies Act] and whose name has not been struck off the register of companies at the time of the application.
Article [_] Restrictions on grant of mineral rights
(1)No mineral right shall be granted to-
(a)an individual who-
(i)is under the age of 18 years;
(ii)is not a citizen of [Country] or has not been ordinarily resident in [Country] for a period of ten years immediately preceding his application for a mineral right;
(iii)is an un-discharged bankrupt, having been adjudged or otherwise declared bankrupt under any written law, or enters into any arrangement or scheme of composition with his creditors; or
(iv)has been convicted of an offence involving fraud or dishonesty;
(b)a co-operative society which is not registered in accordance with the laws of [Country];
(c) a body corporate-
(i)which is not registered or incorporated under the [Companies Act]; or
(ii)which is in liquidation other than a liquidation which forms part of a scheme for the reconstruction or amalgamation of such body corporate;
(iii)in respect of which an order has been made by a court of competent jurisdiction for its winding up or dissolution;
(iv)which has made a composition or arrangement with its creditors;
(v)which has among its shareholders any shareholder who holds at least a ten percent share of the company or a director, who would be disqualified in terms of subparagraphs (i) or (iv) of paragraph (a).
Drawn from Sierra Leone’s mining law (2009), this provision refers back to and modifies the general provision on eligibility for mineral licences. Unlike the DRC Mining Code eligibility provision which makes exploration licences available to foreign and national individuals and companies, the Sierra Leone provision limits the issuance of exploration licences to corporate entities formed under the Companies act of Sierra Leone only. However, a company can be formed under the Companies act by foreign nationals. This provision, in comparison to the DRC provision, provides the Administration with the additional assurance of knowing that each entity eligible for an exploration licence is subject to the provisions of the local Companies act and registered thereunder, as opposed to being an entity formed under the law of a foreign jurisdiction with a different legal system and tradition and possibly a different language and alphabet.
Neither the Companies Act nor the mining law of Sierra Leone requires the participation of local citizens as shareholders or directors of a company formed under the Companies act that is eligible to hold an exploration licence. Civil society in many African countries has advocated such measures, however; and enlightened mining companies often seek local partners. The issue merits consideration in connection with formulating eligibility requirements.
In addition, countries that are members of a regional customs union, economic and/or financial community, or uniform law organization may wish to consider whether companies formed under the similar laws of other member states should be deemed eligible to hold exploration rights.
Regulatory authorities generally require that eligible entities seeking authorization to conduct exploration activities submit particular documents and show proof of certain criteria as part of the authorization application process. Several countries have adopted a two-tier approach to the procedure for issuing exploration licences: that is, (1) an application procedure with defined criteria for areas in which significant deposits have not yet been identified (i.e., “greenfields” projects), and (2) a tender procedure for areas containing known deposits that have been explored or worked previously. For those areas put up for bid, the requirements are set out in the bidding terms and specifications, and the tender is conducted in accordance with established rules for transparency and objectivity. A third possibility is to grant exploration rights to known stratoform deposits by an auction procedure (i.e., by offering them to the highest bidder during a specified auction period, without the other more extensive requirements of a tender procedure).
In addition to identification and eligibility of the applicant, the requirements for the grant of an exploration licence will or may contain some or all of the following:
- The availability of the area requested;
Proof of eligibility and domicile, for the individual applicant and/or the firm seeking authorization;
- The specification of the minerals to be targeted by the exploration project;
- A proposed work program for all or part of the licence term;
- Proof of technical and financial capability to carry out the proposed work program;
- Compliance with limitations on the number of permits or the aggregate area that a person or entity and its affiliates may hold under licence;
·Completion and submission of specified official forms;
- Payment of processing fees upon application; and
- Payment of any fees required as a condition for the issuance of the licence.
A fundamental issue in designing the requirements is whether to (a) restrict access to mineral exploration licences by imposing technical and financial standards as conditions for the grant of rights, or (b) facilitate access to such licences and eliminate non-performing licencees subsequently based on their failure to meet performance standards under their licences.
In some jurisdictions where the right to a mining licence is attached to the exploration licence, subject to the fulfilment of defined conditions, the signature of a contract between the State and the licensee may be required at the time of issuance of the exploration licence. This would often be the case when the right to explore and exploit a known valuable mineral deposit is awarded by a tender process. The contract sets forth the rights and obligations of the licensee during the term of the exploration licence and the conditions under which a mining licence will be issued.In light of increasing global commitments related to Climate Change and Land Use, it would be prudent for the State to require in such cases the conduct of an initial social, environmental and overall sustainable development assessment of the project at an early stage of contract implementation prior to the completion of the exploration phase and the authorization of mine development. The applicant’s commitment to and proposed plans for the funding and conduct of such a study in collaboration with the national and local environmental authorities and their contractors, as well as local communities, could constitute an essential component of the application.
25.2 Example 1:
Article [_] Application for exploration licence
(1) An application may be made for an exploration licence for minerals falling under any of the following groups:
(a) metallic minerals;
(2) An application for an exploration licence including an application in respect of land in an area reserved for applications by tender for exploration licences shall be made to the [Regulating Authority] and shall be in the prescribed form and accompanied by the prescribed fee.
(3) An application for the grant of an exploration licence-
(a) shall contain-
(i) in the case of an individual, his full name and nationality, physical and postal addresses, and attach his recent passport size photograph; or
(ii) in the case of a body corporate, its Corporate name, place of incorporation, names and nationality of directors;
(iii) in the case of more than one person, particulars referred in items (i) and (ii) of each person.
(b) shall state the type of minerals and its relevant group, as indicated in subsection (1);
(c) shall state the size of the area of land over which it is sought, which shall not exceed the maximum area prescribed as provided under section [_] (stating that maximum areas are to be established by regulation), and be accompanied by a plan of the area;
(d) shall contain a statement giving particulars of the financial and technical resources available to the applicant; and
(e) shall contain a statement on the procurement plan of goods and services available in [Country];
(f) shall contain details of any mineral right previously granted to the applicant.
(4) Every application for an exploration licence made in the prescribed form by an applicant who has tendered to the licensing authority the prescribed fee, shall be registered immediately in the register maintained for such applications under this [Act][Code][Law].
(5) Each application registered under subsection (4) shall be assigned a number and the date on which it was received and shall be indicated on an official receipt handed to the applicant or his authorised agent or sent to the applicant by registered mail.
Article [_] Exploration licence by tender
(1) An application for an exploration licence in an area designated as an area for which applications for such a licence are invited by tender shall-
(a) be in the prescribed tender form and accompanied by the prescribed tender fee; and
(b) subject to the terms and conditions of the invitation to tender, include the matters required to be included in applications by section [_] (the general article on the application requirements for an exploration licence).
(2) Applications made under subsection (1) shall be submitted to the [Administrative Reviewer] for its advice.
(3) On receipt of a report from the [Administrative Reviewer], the [Regulating Authority] shall consider the competing bids and shall select the bid which is most likely to promote the expeditious and beneficial development of the mineral resources of the area having regard to
(a) the programme of exploration operations which the applicant proposes to carry out and the commitments as regards expenditure which the applicant is prepared to make;
(b) the financial and technical resources of the applicant; and
(c) the previous experience of the applicant in the conduct of exploration and mining operations, and the successful application shall be treated as an application under section [_] (on the rules governing priority in the case of competing applications) which has priority over any other application and the applicant shall be notified accordingly.
Drawn from Tanzania’s mining law (2010), this provision sets forth the requirements for the grant of an exploration licence (called a prospecting licence in the law).The law provides for a two-tier process of issuing such licences (an application process and a tender process). It sets out the requirements for the licence in the article describing the required application contents and then refers back to them in the article on the conditions for the grant of the licence.
The requirements for obtaining an exploration licence by application include all of the elements described in the immediately preceding annotation and, in addition, the following:
- Statement as to local procurement of goods; and
- Minimum annual expenditure per square kilometer.
25.2 Example 2:
In general, mining licences shall be considered and granted according to a principle of "1st come, 1st served".
(1) All applications for mining rights are to be made using the prescribed form from the Ministry of Mines, a template of which shall be set out in the decree implementing the present [Code][Act][Law].
(2) After correctly completing the form, the applicant is to file their application with said office, with acknowledgement of receipt that indicates the date and time, to the hour and minute, that the application was filed, and constitutes evidence of filing.
(1) Prospecting licences, or "P" licences, relating to a defined area shall be granted by a decision of [the regulatory authority] or its representative, within no more than thirty (30) working days, to the first eligible person who filed an application which meets the conditions specified in Article [_] (which states that the template for application forms shall be set out in the implementing decree) above.
(2) In cases where the applicant is applying pursuant to an exclusive permit to reserve an area, they are to attach said permit, duly endorsed by the authorities for the relevant Decentralised Territorial Collectives, to their application.
Drawn from Madagascar’s mining law (1999), this provision provides for the issuance of an exploration licence to the first eligible applicant who submits a complete application for an available area. No proof of technical or financial capacity is required; and no work program is reviewed as a requirement for the grant of the licence.
Madagascar is an example of a jurisdiction that relies on ex-post requirements for maintaining the validity of an exploration licence rather than limiting access to exploration licences by imposing requirements for their issuance.
In order for there to be accountability of the granting authority, there should not only be standards for the grant of licences that limit or eliminate the granting authority’s discretion, but also a procedure for independent review of the authority’s decision to refuse to issue a licence.
A due process review procedure would include an initial procedure for reconsideration by the granting authority and/or his or her hierarchical superior, followed by a judicial or quasi-judicial review of the ultimate decision on reconsideration.
If a competitive bidding procedure is used to award the exploration licence, the bidding rules (either in the Mining law or regulations, or in a separate law and regulations on public contracting) should include a clear statement of the procedure and criteria for challenging any awards of exploration rights. If the bidding procedure involves a two-stage process (i.e., a bidder qualification stage to narrow the field of eligible bidders and a bid evaluation stage to determine the prevailing bid, if any), then the rules should provide separate procedures for challenges of a determination of ineligibility, on the one hand, and challenges of an award of a licence, on the other hand. The grounds for a challenge of a decision in a competitive bidding process should be narrowly defined but should include, for example:
- Conflict of interest or misconduct by one or more members of the bid review commission affecting the outcome;
- Decision of the commission based on criteria or weighting other than those specified in the bidding rules;
- Improper influence on the decision of the commission; and
- Decision of the commission contrary to public policy established by law.
If a procedure other than competitive bidding is used to award the licence (e.g., first-come-first served, auction, or best offer), the licence refusal appeal process should be specified in the Mining law. That process should enable appeals of refusals by in the action as well as explicit refusals.
In order to enable appeals of licence refusals to potentially succeed, the licence granting procedure set forth in the Mining law should include clear statements of the following elements:
- The criteria for the grant of the licence;
- A registry and mapping of all applications for exploration licences, accurately recording the name of the applicant, the location of the exploration area sought, the mineral substances targeted and the date and time of filing the application;
- The timeframe within which a decision to grant or refuse the licence must be made; and
- The requirement that the reasons for the refusal of a licence must be provided by the granting authority to the applicant in writing;
- The timeframe within which requests for reconsideration and appeals of refusals must be filed, and with which authority.
In jurisdictions that experience a high volume of applications for mineral rights, and an actual or potential high volume of disputes over mineral rights, it may be desirable and justifiable to establish a special adjudicatory tribunal to resolve such conflicts, including appeals of licence refusals. For example, such appeals could be submitted to a review board composed of members of a mineral resource development advisory commission consisting of representatives of government, industry, artisanal and small scale mining, civil society and authorities and community leaders from the affected areas.
25.3 Example 1:
Article [_] The end of the application assessment
(1) The assessment of an application for mining and/or quarrying rights shall come to an end on the day on which the applicant is notified of the decision to grant the application or the day of the judge's decision as provided for in Article [_] (on registration through legal channels) of the present [Code][Act][Law].
(2) In the event of a decision to refuse the application, and subject to the provisions of Article [_] (on the application of the common law appeals to a higher administrative authority) and Article [_] (on the shortening of time periods within which appeals may be brought) of the present [Code][Act][Law], the assessment of an application for mining and/or quarrying rights shall come to an end on the day on which the applicant is notified of the decision.
Article [ ] The application of the common law
Subject to the provisions of Article [_] (on registration through legal channels) and Article [_] (on matters which concern appeal proceedings) of the present [Code][Act][Law], an appeal against administrative acts decreed by administrative authorities in application of, or in violation of, the provisions of the present [Code][Act][Law], or those of the Mining Regulations shall be governed by the common law, in particular by the provisions of Articles [_] of the [Code of Judicial Organisation and Jurisdiction] and by the [relevant law] relating to procedure before the [Supreme Court], as amended and supplemented to date.
Article [_] The shortening of time periods
(1) Notwithstanding the provisions of the [_] Act mentioned above, the applicant's preliminary appeal, as a litigant before the Administrative Division of the [Supreme Court of Justice], to the authority which may set aside or amend the administrative act must be brought within thirty days of the date on which the decision was published or the applicant was personally notified of it. A request to set aside the decision is to be brought within twenty days from the day on which notification was given for the total or partial dismissal of the appeal.
(2) The time limit for filing the reply and the one for the administrative file shall be fifteen working days from the date of notification of the appeal. The same time limit shall apply for the opinion of the [Attorney General of the Republic]. An extension of the time limits imposed on the parties for sending in the appeal and the reply, which may possibly be decided on by a reasoned order of the President of the Administrative Division of the [Supreme Court of Justice], may not exceed 12 working days.
(3) The shortening of the time limits provided for in the preceeding paragraphs of the present Article only apply to refusals to grant mining and/or quarrying rights, and of the approval or perfection of mortgages.
(4) In all circumstances, the judgement of the [Supreme Court of Justice] shall be delivered within thirty working days of the deliberations relating to the case.
Drawn from DRC’s mining law (2002), this provision provides for an expedited administrative and judicial appeal process in the case of refusal to grant a licence under the general procedures for judicial review of administrative decisions. It includes:
- Filing a request for reconsideration with the granting authority within 30 days of the notification of the decision to refuse the licence.
- Filing a request for judicial reversal within twenty days of the rejection of the request for reconsideration;
- Filing of the briefs in opposition and the administrative record within 15 days of notification of the appeal;
- Limitation of the power of the court to grant filing deadline extensions: 12 days maximum;
- Issuance of the decision of the Supreme Court of Justice within 30 days of closure of the pleadings.
25.3 Example 2:
(1) Any person whose rights or legitimate expectations have been materially and adversely affected or who is aggrieved by any administrative decision in terms of this [Act][Code][Law] may appeal in the prescribed manner to –
(a) the [Regulating Authority], if it is an administrative decision by an officer of the [Regulating Authority]; or
(b) the [Administrative Reviewer], if it is an administrative decision by the [Regulating Authority].
(2) An appeal in terms of subsection (1) does not suspend the administrative decision, unless it is suspended by the [Regulating Authority], as the case may be.
(3) No person may apply to the court for the review of an administrative decision contemplated in subsection (1) until that person has exhausted his or her remedies in terms of that subsection.
(4) Sections [_] of the [Administrative Procedures Act], apply to any court proceedings contemplated in this section.
Drawn from South Africa’s mining law (2002), this provision acknowledges a right of appeal under the Promotion of Administrative Justice act and imposes an obligatory internal administrative appeal (a request for reconsideration) as a prerequisite. It does not establish expedited deadlines in the manner that the DRC provision does.
The area refers to the physical boundary marking the space grantable for exploration. Most laws only provide for the maximum size permitted under the exploration licence, but a law may also provide the minimum threshold allowed. Some laws will mandate the licence holder to clearly demarcate the granted space with physical markers (stones, pegs, wooden slats), while others require solely that the size of the property be listed in the licence document itself, in the mining cadastre, and/or in the applicant’s application documents. The area covered by an exploration licence should be subject to the requirements as to form and orientation imposed by the cadastral system.
A licence should indicate the specific area granted to the licence holder, usually by geographic references and official map coordinates. Due to the larger footprint of prospecting/reconnaissance activities relative to exploration activities, the maximum grantable area for exploration is usually smaller in size relative to the maximum grantable area for prospecting/reconnaissance, subject to being reduced over time either by voluntary relinquishment or mandatory size reductions at renewals. Voluntary relinquishment can be encouraged by a system of gradually increasing annual fees payable per unit of surface area.
25.4 Example 1:
(1) Subject to the provisions of this [Act][Code][Law], an exploration licence shall cover such area, not exceeding 1000 km2, as is in accordance with the applicant’s application.
(2) Subject to the provisions of subsection (4), the exploration area shall be reduced in size to eliminate therefrom—
(a) at the end of the initial term of the exploration licence, not less than half of the initial area;
(b) at the end of each period of renewal, half of the remaining area, or such lower proportion as the [Regulating Authority] may in any case agree; and
(c) the area covered by any retention licence or mining licence granted thereon.
(3) The holder of an exploration licence shall designate, prior to the end of each of the periods referred to in subsection (2), the area or areas to be eliminated from the exploration area and, in default thereof, the designation shall be made by the [Regulating Authority].
(4) Where a person holds two or more contiguous exploration licences covering the same period and the same mineral or minerals the [Regulating Authority] shall, for the purposes of the elimination, under subsection (2), of part of any of the areas thereof, permit the areas covered thereby to be deemed to be one area, the subject of one such exploration licence.
(5) No compensation shall be payable to the holder of any exploration licence arising out of reductions in area effected in terms of subsection (2).
Drawn from Botswana’s mining law (1999), this example represents perhaps the outer limit (1000 km2) of the maximum size of area available under an exploration licence (called prospecting licence under the Botswana law). It is fairly typical in requiring a reduction of at least half of the area upon each renewal, but allows some flexibility in the case of renewals after the first.
Areas covered by retention licences are eliminated because they come under a separate licence (i.e., a licence holder may obtain a retention licence for part of a licence area while continuing to hold the rest under the prospecting licence).
25.4 Example 2:
(1) The area covered by a prospecting licence shall be a polygon with straight sides which are oriented north-south and east-west, with geographic north as the reference, with the exception of land borders and international waters.
(2) The minimum length of each segment of the polygon shall be (1) kilometre.
(3) The area covered by a prospecting licence shall have a surface area of between one (1) square kilometre and four hundred (400) square kilometres.
(4) Each time a prospecting licence is renewed, it's surface area shall be reduced by a quarter.
(5) However, the prospecting licence holder may choose to retain the same surface area provided that they prove that work is being carried out over the entire area which is under the relevant licence. In this event, the prospecting licence holder shall be required to pay an option fee, the rates and terms of which shall be determined by decree.
Drawn from Côte d’Ivoire’s mining law (2014), this provision imposes cadastral shape, orientation and border limitations on the area available under an exploration licence, as well as a minimum (1 km2) and a maximum (400 km2) size limit on the area.
This article is an innovative approach to the typical area reduction requirement for renewals. In light of the smaller maximum area allowed, the article only requires that the area held be reduced by one quarter, rather than one half, at each renewal. Furthermore, it allows the licence holder to opt to hold onto a larger area at renewal provided that the holder demonstrates that work is being done on the larger area and pays a special fee (set by regulation) in order to exercise that option.
Provisions that lay out, for the holder of an exploration licence, the necessary responsibility or duty to undertake certain actions or restriction from undertaking certain actions or causing certain effects are collectively treated as obligations. Noncompliance with these obligations may lead to fines and/or ordered suspensions of operations until the licencee is in compliance. Where suspension occurs, continued, uncured non-compliance beyond a specified time period may result in revocation of the licence.
Specific obligations of an exploration licence holder may include obligations before, during and after operations. Obligations prior to the commencement of operations may include: (1) introduction and presentation to local authorities; (2) preparation and regulatory approval of an environmental and social mitigation plan; and (3) establishment of an environmental restoration surety bond or fund.
Obligations during operations may include:
- Commencement of operations within a specified time period;
- Posting of an environmental surety;
- Payment of annual fees per unit of surface area held;
- Implementation of an approved work program;
- Filing regular reports on work and investment completed and results achieved (e.g., geological findings);
- Implementation of approved environmental and social mitigation plan, and filing of periodic reports thereon;
- Compliance with labor, health and safety regulations;
- Compliance with applicable immigration, customs and tax laws and regulations;
- Compliance with all applicable contract terms, in countries where a contract between the State and each exploration licence holder is required.
Obligations upon the closure of operations normally include a final report of work carried out and results achieved, as well as the implementation of the site closure and restoration provisions of the approved environmental impact mitigation plan, unless the site is to be developed as a mine.
25.5 Example 1:
Article [_]: Obligations for maintaining the validity of the right
(1)In order to maintain the validity of their mining or quarrying right, the holder must:
(a) commence work within the period specified in Article [_] of the present [Code][Act][Law];
(b) pay the annual surface area fees per square relating to their title, each year before the deadline set in Article [_] (on the amounts due as annual surface area fees per square) of the present [Code][Act][Law].
(2) Should one or more of these obligations not be fulfilled, the holder shall lose their right in application of the procedure provided for in Articles [_] (on failure to comply with administrative obligations, and the related penalties) of the present [Code][Act][Law].
(3) Should the holder fail to comply with the obligations listed in the following chapters, they shall be subject to fines and/or possibly with an order to suspend operations or, in the case of an offence, shall be prosecuted.
Article [_] The obligation to commence work
A Prospecting Licence holder shall be required to commence work within six months from when the title establishing their right was issued.
Article [_] The obligation to pay the annual surface area fees per square
(1) To cover costs for the services and management relating to the rights established by mining titles, annual surface area fees per square, for each mining or quarrying title which is issued, shall be collected for the Ministry of Mines which shall redistribute a portion to the departments of [the regulatory authority] responsible for the administration of the present [Code][Act][Law].
(2) Holders of Prospecting Licences, Operating Licences, Operating Licences relating to Tailings, Operating Licences for Small-Scale Mining, Permits to Prospect for Quarry Products and Permanent Quarry Operating Permits shall pay the surface area fees for the first year when the mining or quarrying title is issued.
(3) The holder is to settle the annual surface area fees per square for each following year before the end of the first quarter of the calendar year. However, annual surface area fees are to be paid pro rata to the relevant time period, when the initial title is issued, or in the last year during which the title is valid.
(4) Annual surface area fees per square are to be paid at the relevant counter at the Ministry of Mines which issued the mining or quarrying title, which shall issue the holder with a receipt when payment is made.
Article [_] Environmental protection during prospecting
(1) Before prospecting work relating to mining or quarry products may commence, the holder of a Prospecting Licence or a Permit to Prospect for Quarry Products must draw up and obtain approval for an Environmental Management Plan (Plan d’Atténuation et de Réhabilitation (PAR)) for the proposed activities.
(2) The terms of the PAR and its approval shall be laid down in the regulations.
(3) The approval of a PAR shall fall under the jurisdiction of the department responsible for environmental protection within the [the regulatory authority] in collaboration with [the regulatory authority for the environment].
Article [_] Declaration of indicators of an archaeological discovery
Article [_] The discovery of items relevant to the national cultural heritage
Article [_] The jurisdiction of [the regulatory authority]
Article [_] The declaration of an accident in a mine or quarry
Article [_] The use of explosive products
Article [_] The relationship with local authorities
Article [_] Registers and reports
Article [_] Inspections
Article [_] The commencement and closure of a prospecting or operation/s area.
Drawn from DRC’s mining law (2002), this provision deals with obligations in two chapters. Chapter 1 establishes the principle that the holders of all licences must comply with two specific obligations that have specific time requirements in order maintain the validity of their rights:
- begin work within the time specified in article 197 of the Code; and
- pay the surface fee per square unit of area related to their title before the deadline set in article 199 of the Code.
Failure to comply with either of these obligations results in the licensee being stripped of the licence.
The licencee’s failure to comply with the obligations listed in the second chapter will be penalized by fines and/or possible orders to suspend operations, or in the case of violations, by judicial process.
This bifurcation of obligations into two categories and the clarity and objectivity of the two obligations that are enforced by revocation of the title provides great security of title to licencees and also ensures prompt and complete payment of the fees that fund the work of the Regulating Authority.
The obligations in the second category are numerous and are only referenced here by article title, except for the obligation to prepare and obtain the approval of an Environmental Mitigation Plan (PAR) before commencing work (which must begin within 6 months of delivery of the licence). The process of approval is expedited by a sectoral environmental review authority.
25.5 Example 2:
Article [_] Legal nature of exploration right, mining right, or production right, and rights of holders thereof
(1) No person may prospect for or remove, mine, conduct, technical co-operation operations, reconnaissance operations, explore for and produce any mineral or petroleum or commence with any work incidental thereto on any area without –
(a) an approved environmental management programme or approved environmental management plan, as the case may be;
(b) a prospecting/reconnaissance permission, exploration right, permission to remove, mining right, mining permit, retention permit, technical co-operation permit, reconnaissance permit, exploration right or production right, as the case may be; and
(c) notifying and consulting with the land owner or lawful occupier of the land in question.
Article [_]. Rights and obligations of holder of exploration right
(1) The holder of an exploration right must –
(a) lodge such right for registration at the Mining Licences Office within 30 days of the date on which the right –
(i) becomes effective in accordance with the provisions of this [Act][Code][Law]; or
(ii) is renewed in accordance with the provisions of this [Act][Code][Law];
(b) commence with exploration activities within 120 days from the date on which the exploration right becomes effective or such an extended period as the [Regulating Authority] may authorise;
(c) continuously and actively conduct exploration operations in accordance with the exploration work programme;
(d) comply with the terms and conditions of the exploration right, relevant provisions of this [Act][Code][Law] and any other relevant law;
(e) comply with the requirements of the approved environmental management programme;
(f) pay the prescribed exploration fees to the State; and
(g) subject to section [_] (on the rules regarding the removal and disposition of minerals), pay the State royalties in respect of any mineral removed and disposed of during the course of exploration operations.
Article [_]. Permission to remove and dispose of minerals
(1) Subject to subsection (2), the holder of an exploration right may only remove and dispose for his or her own account any mineral found by such holder in the course of exploration operations conducted pursuant to such exploration right in such quantities as may be required to conduct tests on it or to identify or analyse it.
(2) The holder of an exploration right must obtain the [Regulating Authority]'s written permission to remove and dispose for such holder's own account of bulk samples of any other minerals found by such holder in the course of exploration operations conducted pursuant to such exploration right.
Article [_] Information and data in respect of prospecting/reconnaissance and exploration
(1) The holder of an exploration right or prospecting/reconnaissance permission must –
(a) keep proper records, at the registered office or place of business, of exploration operations and the results and expenditure connected therewith, as well as borehole core data and core-log data, where appropriate; and
(b) submit progress reports and data, in the prescribed manner and at the prescribed intervals, to the [Regulating Authority] regarding the exploration operations.
(2) No person may dispose of or destroy any record, borehole core data or core-log data contemplated in subsection (1)(a) except in accordance with written directions of the relevant [Officer of the Regulating Authority].
Article [_] Environmental management principles
(1) The principles set out in section [_] of the [National environmental legislation ] –
(a) apply to all exploration and mining operations, as the case may be, and any matter or activity relating to such operation; and
(b) serve as guidelines for the interpretation, administration and implementation of the environmental requirements of this [Act][Code][Law].
(2) Any exploration or mining operation must be conducted in accordance with generally accepted principles of sustainable development by integrating social, economic and environmental factors into the planning and implementation of exploration and mining projects in order to ensure that exploitation of mineral resources serves present and future generations.
Article [_] Integrated environmental management and responsibility to remedy
(1) The holder of a reconnaissance permission, exploration right, mining right, mining permit or retention permit –
(a) must at all times give effect to the general objectives of integrated environmental management laid down in the [relevant environmental legislation];
(b) must consider, investigate, assess and communicate the impact of his or her exploration or mining on the environment as contemplated in the [relevant environmental legislation];
(c) must manage all environmental impacts –
(i) in accordance with his or her environmental management plan or approved environmental management programme, where appropriate; and
(ii) as an integral part of the prospecting/reconnaissance, exploration or mining operation, unless the [Regulating Authority] directs otherwise;
(d) must as far as it is reasonably practicable, rehabilitate the environment affected by the exploration or mining operations to its natural or predetermined state or to a land use which conforms to the generally accepted principle of sustainable development; and
(e) is responsible for any environmental damage, pollution or ecological degradation as a result of his or her prospecting/reconnaissance, exploration or mining operations and which may occur inside and outside the boundaries of the area to which such right, permit or permission relates.
(2) Notwithstanding the [Companies Act], or the [other relevant legislation], the directors of a company or members of a close corporation are jointly and severally liable for any unacceptable negative impact on the environment, including damage, degradation or pollution.
Article [_] Financial provision for remediation of environmental damage
(1) The holder of an exploration right, mining right or mining permit must annually assess his or her environmental liability and increase his or her financial provision to the satisfaction of the [Regulating Authority].
(2) If the [Regulating Authority] is not satisfied with the assessment and financial provision contemplated in this section, the [Regulating Authority] may appoint an independent assessor to rehabilitate the closed mining or exploration operation in respect of latent or residual environmental impacts.
Drawn from South Africa’s mining law (2002), this provision requires (for exploration licences called prospecting permits) compliance with all of the obligations noted above and also:
- Approval of an environmental management plan (as part of the licence grant process);
- Notification and consultation with the landowner or lawful occupier;
- Presentation of the licence to the Mining Licences office for registration;
- Commencement of exploration (called prospecting) activities within 120 days of the effective date of the licence;
- Maintenance of records, drilling logs, etc.; and
- Obtaining the [Regulating Authority]’s approval for any removal of bulk samples for testing.
This is a clear and comprehensive set of specific obligations of exploration licence holders.
Provisions that address what possession of an exploration licence allows the licence holder to do or what the licence holder may be entitled to are collectively treated as rights. The rights of an exploration licence holder are usually exclusive exploration rights at depth within the licenced area. Although the licence usually relates to specified minerals only, under most mining laws no other exploration or mining licence can be granted to another party over the same area, except a short-term quarrying licence.
The exploration licence entitles the holder to carry out exploration activities, as defined; but not to engage in mining. The exploration licence holder generally also has the exclusive right to apply for an exploitation licence over the same area, in whole or in part, during the term of the licence.
Depending on the defined nature of the exploration right, the licensee may have the right to pledge, mortgage or transfer the licence.
25.6 Example 1:
(1) A prospecting licence confers on the holder an exclusive right to prospect for mining materials, within the boundaries of the holder's area, including surface area and depth of the right, as well as an exclusive right to dispose of any products extracted as part of said prospecting.
(2) It confers on the holder an exclusive right to request and obtain an operating licence, at any time during term of validity for the prospecting licence, if they have performed their obligations under the present Act, in the the event they discover one or more mineral deposits within the area under the prospecting licence.
(3) A prospecting licence constitutes a movable, indivisible right and, may not be subleased, subject of a pledge or a mortgage.
(1) A prospecting licence holder shall have the right to freely dispose of products extracted during the prospecting and assaying, provided that the prospecting work does not in fact constitute operating work.
(2) Disposals shall only be possible under the following conditions:
(a) the prospecting licence holder has made a prior declaration relating to the products extracted, to the Mining Department (Administration des Mines);
(b) the prospecting licence holder has paid the mining taxes relating to said extracted products, unless an exemption has been granted for the samples by the Mining Department and the Department for the Economy and Finance (Administration de l'Economie et des Finances).
(3) The maximum quantities of samples which may be collected shall be specified by decree.
The rights of a mining right holder shall relate to the entire extent of the demarcated area under the mining title, with no limit as to depth, extending down within vertical lines based on the defined area on the surface.
(1) A mining right may be assigned or transferred subject to the prior written approval from [the regulatory authority] and under the conditions provided for by decree.
(2) Any agreement for the transfer or assignment of a mining right must be subject to the condition precedent of said authorisation.
(2)The approval of [the regulatory authority] shall be automatic where the mining right holder has fulfilled their obligations under the [Code][Act][Law].
Drawn from Côte d’Ivoire’s mining law (2014), this provision states that the exploration licence confers on the licence holder an exclusive right to explore for minerals other than industrial minerals and to apply for an exploitation permit to develop commercial deposits identified within the licence area. It is a generous provision in that the exploration licence includes an exclusive right as to all such minerals, rather than specific types or classes of minerals as in some mining laws. Furthermore, that exclusive right includes the right to apply for an exploitation licence for multiple deposits within the licenced area - as opposed to a single deposit as in some more restrictive mining laws - provided that the licence holder is in compliance with its obligations under the Mining Code.
According to this provision, the exploration licence holder has the right to dispose of products extracted during the course of exploration. However, such right is subject to the condition that the exploration work not constitute exploitation work, and to the further conditions that the licence holder (a) submits a declaration to the Regulating Authority prior to any such disposition and (b) pays the mining taxes (e.g. royalties) applicable to the mineral products. Exemptions from the mining tax payment obligation are to be granted for samples, the maximum amounts of which are to be set by regulation.
The exploration licence is not eligible for pledge, mortgage or sublease; but it may be transferred with the approval of the Regulating Authority, to which the licensee is entitled if in compliance with its obligations under the Mining Code.
25.6 Example 2:
(1) Subject to the provisions of this [Act][Code][Law] and the Regulations, an exploration licence confers on the holder the exclusive right to carry on exploration operations in the exploration area for minerals to which the licence applies.
(2) In the exercise of the rights conferred by this section, the holder may, subject to section [_] (on restrictions on the right of a mineral licence holder to enter land), either himself or by his employees or agents, enter upon the exploration area and erect camps and temporary buildings and may erect installations in any water forming part of the exploration area.
(3) The holder of an exploration licence for gemstones who in the course of carrying out exploration operations under the exploration licence recovers gemstones, may dispose of the gemstones by sale to a licenced dealer and shall promptly following any such sale submit particulars thereof to the [Regulating Authority], showing the name and business address of the dealer, a description of the stones, their weight and a copy of a receipt given by the purchaser for the price received.
(4) The holder of a an exploration licence for gemstones who recovers gemstones in the course of exploration operations shall for the purpose of holding the gemstones and selling them pursuant to subsection (3) be deemed to be a mineral right holder.
(5) The exploration licence holder is authorized to apply for a retention licence.
(6) The exploration licence holder is entitled to apply for and obtain a special mining licence or a mining licence, subject to compliance with the application requirements specified in other articles.
Drawn from Tanzania’s mining law (2010), which calls an exploration right a prospecting licence, this provision provides for an exclusive exploration right that entitles the holder to enter the exploration area and erect camps and temporary buildings thereon in connection with the holder’s exploration activities. It also entitles the holder of a “prospecting” licence for gemstones to sell gemstones recovered during exploration to a licenced dealer. In the event of such sales, the prospecting licence holder is required to submit the particulars of the transactions to the Commissioner of Mines in order to enable the Mining Administration, among other things, to confirm that the licenced dealer has paid the applicable royalty, or enforce such payment by the dealer if it has not been made. The mining law provides that licenced dealers and licenced brokers are responsible for the payment of royalties on gemstones that they purchase.
This provision also authorizes the licence holder to apply for a retention licence and to apply for and obtain a “special mining licence” (which is long term) or a mining licence (which has a shorter term), subject to compliance with the relevant application requirements.
The term of an exploration licence should be long enough to allow time for enough investigation to enable the licence holder to make a determination of whether to pursue intensive drilling and sampling of specific targets within the licence area, provided that renewal terms are available during which feasibility studies, environmental and social impact studies and required or necessary plans for local procurement, hiring and training, and community development can be developed or negotiated. It is thought that the initial term should be short enough to prevent licensees from holding large areas for excessive periods without developing them; however, this goal could also be achieved by gradually increasing the annual fees per unit area payable by the licensees, to encourage voluntary relinquishment.
In setting the term of the exploration licence, consideration should be given to whether the term includes the initial period (typically six months) within which certain conditions prior to the commencement of operations must be fulfilled (for example, preparation, submission and approval of an environmental and social impact mitigation plan; funding of an environmental rehabilitation guarantee or account; presentations to local authorities; and negotiations of surface access rights with the owners or lawful occupiers of land.)
It should be noted that as requirements are increased for the grant of a mining licence (for example, Economic and Social Impact Study (ESIS), community development agreement, local procurement, hiring and training programs), more time will be needed in order to accomplish them.
The typical term of an exploration licence in Africa is 3 years, or a period not exceeding three years. (Examples: Botswana, Cameroon, CAR, Ghana, Guinea, Malawi, Mauritania, Morocco, Nigeria, South Africa, Uganda, Zimbabwe.)
The term is 4 years, or for a period not exceeding four years, in Côte d’Ivoire, DRC for precious stones, Sierra Leone and Tanzania. The term is 5 years in the DRC except for precious stones, as well as in Madagascar and Mozambique. In Angola the term is set by contract.
25.7 Example 1:
(1) Where an applicant is entitled to the grant of an exploration licence under the terms and conditions of this [Act][Code][Law], the [Regulating Authority] shall issue to the applicant the exploration licence as provided in that section and the licence so issued shall subsist for the following periods-
(a) for the initial exploration period for which the applicant has applied, a period not exceeding four years;
(2) In determining the date for the commencement of the period for which the licence is granted, the licensing authority may take account of any period not exceeding six months from the date of the grant which is required by the applicant to make any necessary preparations for exploration operations.
Drawn from Tanzania’s mining law (2010), this provision reflects a progressive awareness of the potential need for a somewhat longer than normal exploration term as well the need to accomplish certain formalities and obtain certain approvals before actual exploration work can begin.
25.7 Example 2:
(1) Where the [Regulating Authority] is satisfied that an initial period is required to make the necessary preparations to carry on exploration operations he may, in an exclusive exploration licence, specify a period (not exceeding three months) as the preparation period.
(2) The term of an exclusive exploration licence is the period for which the licence is granted, not exceeding three years, stated in the licence, and any preparation period specified in the licence.
(3) The term of an exclusive exploration licence commences on and includes the date of the grant of the licence, as stated in the licence.
Drawn from Malawi’s mining law (1981), this provision provides for the standard exploration term of up to three years, but also takes into account the potential need for a preparation period and provides for the possible incorporation of a preparation period of up to three months into the term of the exploration licence (called prospecting licence).
Addressed often at the same time as the term of the licence, renewal of licence refers to provisions determining when, for how long, and how many times a licence holder may extend the initial duration of the exploration licence. Given the relatively short initial term of exploration licences, renewal terms are generally necessary for the completion of the studies and plans required prior to mining operations.
Licence holders who are in compliance with the terms of their licence and their obligations under the mining law are generally entitled to renewals.
Most countries provide for two renewal terms, which may be of the same length as the initial term or may be for shorter periods.
Most countries have ultimate term limits on the combined initial and renewal terms; but ultimately, term limits are arbitrary and may be inadequate for the necessary preparation to develop a complex deposit or one situated in an area presenting major logistical or environmental challenges, or simply to finalize a feasibility study under difficult market conditions. To deal with such situations, Botswana, Namibia, Tanzania and Uganda provide for the availability of a retention licence after the exhaustion of renewal terms under an exploration licence.
Mining laws generally require an application for the renewal of an exploration licence to be filed no later than a certain date prior to the end of the initial term, in order to allow time for processing of the application before the initial term expires. The better mining laws also provide that an exploration licence for which a renewal application has been timely filed are automatically extended until they are either renewed or the renewal is definitively denied.
Most renewal provisions require the relinquishment of a percentage of the area held under the exploration licence (usually half) upon each renewal. An alternative approach would be to permit the holder to retain a larger area upon the payment of an additional fee in order for the licence holder to retain the area that would otherwise be subject to mandatory relinquishment (see Article 24 of the 2014 Mining Code of Côte d’Ivoire, for example). As a general matter, mining laws make very large areas available for initial prospecting/reconnaissance activity, but reduce the maximum size of the area that may be retained upon each renewal or transition from prospecting/reconnaissance to exploration and from the latter to exploitation. In doing so, the laws seek to maximum efficiency on the part of licence holders so that the country’s mineral resources are developed expeditiously, thereby generating employment, commercial activity and fiscal revenues that can be used for other national purposes. Most mining laws require reduction of the area licenced for exploration upon renewals in order to prevent the tying up of areas larger than are necessary for a normal exploration program and to make the excess area available to other prospective applicants who may be more highly motivated to conduct exploration in the relinquished area than the initial licence holder.
25.8 Example 1:
(1) Where an applicant is entitled to the grant of an exploration licence, the [Regulating Authority] shall issue to the applicant the exploration licence as provided in that section and the licence so issued shall subsist for the following periods-
(a) for the initial exploration period for which the applicant has applied, a period not exceeding four years;
(b) where application for renewal has been made by the holder in the prescribed form, for the first period of renewal for which the applicant has applied, a period not exceeding three years;
(c) where application for renewal has been made by the holder in the prescribed form, for the second period of renewal for which the applicant has applied, a period not exceeding two years;
(d) where the holder is not in default and at the end of the second period of renewal a further period is required to complete a feasibility study, already commenced by the holder, for such further period as may be reasonably required for that purpose, but not exceeding two years.
(2) A holder of the licence who intends to renew the licence shall, not later than one month before expiry date of the licence, submit an application for renewal of the exploration licence.
(3) The [Regulating Authority] shall, on application of the holder of a licence granted under subsection (1) of this section and on payment of prescribed fees for renewal, renew the exploration licence-
(a) at the end of the initial exploration period or, as the case may be, at the end of the first renewal period, for the period referred to in paragraphs (b) and (c) of subsection (1);
(b) at the end of the second renewal period, in a case falling under paragraph (d) of subsection (1), for the period required to complete the feasibility study.
(4) The obligation of the [Regulating Authority] to renew an exploration licence is subject to the condition that-
(a) the holder is not in default except that the [Regulating Authority] shall not reject an application to renew an exploration licence on the grounds that the holder is in default, without first serving on the holder a notice giving particulars of the default and requiring the holder within a reasonable time specified in the notice to remedy the default; and
(b) the holder, on renewal under paragraph (a) of subsection (3), has relinquished in the case of a first renewal fifty per centum of the area held during the initial exploration period and in the case of a second renewal fifty per centum of the balance, and has by notice in writing to the [Regulating Authority] given a sufficient description of the areas he is relinquishing.
(5) The relinquished areas shall be displayed on the notice board at the [[Regulating Authority] headquarters and local offices on a monthly basis.
(6) An exploration licence for gemstones other than kimberlitic diamonds, and an exploration licence for building materials shall subsist for one year from the date of grant and shall not be subject to renewal.
(7) The obligations of the [Regulating Authority] under paragraph (b) of subsection (4) shall not apply in the case where the exploration area is not more than twenty square kilometres.
Drawn from Tanzania’s mining law (2010), this provision clearly states the conditions under which the exploration (called prospecting) licencee is entitled to renewals, when the applications must be filed, and the length of the renewal terms.
The terms of exploration licences for metallic and processed minerals decline from 4 years to 3 years for the first renewal and 2 years for the second and third renewals. (For gemstones other than diamonds, there is only a one-year initial term, non-renewable.) An exploration licence for such minerals can therefore be held for up to 11 years in Tanzania, which also provides for the issuance of a retention licence for a term of 5 years, renewable once for a like term, if the required justification is demonstrated. Reduction of the surface area by half is required at each renewal, but not below 20 square kilometres.
By contrast, the one-year terms of exploration licences for gemstones other than kimberlitic diamonds and for building materials are not renewable.
25.8 Example 2:
(1) The holder of an exploration licence may, not later than ninety calendar days before the initial expiry of the licence, apply to the Mining Cadastre Office for a first renewal of the licence in respect of not more than one hundred and twenty-five square kilometres of the exploration licence area, except that where the results of exploration to date strongly indicate the presence of widespread mineralisation such that a surrender to one hundred and twenty-five square kilometres would result in some highly prospective areas being surrendered, the [Regulating Authority], on the advice of the Minerals Advisory Board, may exceptionally allow such areas constituting more than one hundred and twenty five square kilometres to be retained.
(2) An application for the first renewal of an exploration licence-
(a)shall be accompanied by-
(i)a detailed annual report as prescribed describing all operations carried out in the previous year together with an annual financial report for the same period, plus a surrender report as prescribed, covering in detail all work carried out over any portion of the ground to be surrendered and accompanied by all results, data, information and interpretation since the grant of the exploration licence;
(ii)a proposed programme of exploration operations to be carried out during the period of first renewal and the estimated cost thereof;
(iii)a plan identifying that part of the exploration licence area for which renewal is sought; (iv)a description of the contiguous blocks comprising the exploration licence area for which renewal is sought, identified in the prescribed manner; and
(b)shall give particulars of any alteration in the matters stated in the application for the grant of the licence under paragraphs [_] of section [_] (on the required elements of an application for an exploration licence).
(3) The Mining Cadastre Office shall forward an application for the first renewal of an exploration licence to the Minerals Advisory Board.
(4) Upon receipt of a completed application for the renewal of an explorations licence from the Mining Cadastre Office, where the [statutory advisory board] has determined that an application for the renewal of an exploration licence has met all the criteria for such licence the [statutory advisory board] shall certify to the [Regulating Authority] in the prescribed form that it advises that the application be approved, and such certification shall be recorded in the mining cadastre registry.
(5) The [Regulating Authority] shall, subject to all prescribed criteria of this [Act][Code][Law] and of the regulations, on the certified advice of the Minerals Advisory Board, renew the licence for the reduced area applied for with or without variation of the conditions of the initial licence, for a period not exceeding three years.
(6) The holder of an exploration licence may, not later than ninety calendar days before the expiry of a once-renewed licence apply to the Mining Cadastre Office for a second renewal of the licence.
(7) An application for the second renewal of an exploration licence-
(a)shall be accompanied by-
(i)a report on exploration operations carried out so far and the direct costs incurred thereby;
(ii)a proposed programme of exploration operations, feasibility studies, and environmental impact assessments to be carried out during the period of second renewal and the estimated cost thereof;
(iii)a plan identifying that part of the exploration licence area for which renewal is sought, which shall not be greater than one hundred and twenty-five square kilometres unless it can be conclusively demonstrated that to do so would unavoidably exclude part of an economically recoverable mineral deposit;
(iv)a description of the blocks comprising the exploration licence area for which renewal is sought, identified in the prescribed manner;
(b)shall give particulars of any alteration in the matters stated in the application for the grant of the licence under paragraphs [_] of section [_] (on the required elements of an application for an exploration licence); and
(c)shall provide evidence that a mineral discovery has been made that may be of commercial value.
(8) The Mining Cadastre Office shall forward an application for the second renewal of an exploration licence to the Minerals Advisory Board.
(9) Upon receipt of a completed application for the second renewal of an explorations licence from the Mining Cadastre Office, where the Minerals Advisory Board has determined that an application for the second renewal of an exploration licence has met all the criteria and where the holder of an exploration licence who has made and reported a discovery of possible commercial value, the Board shall certify to the [Regulating Authority] in the prescribed form that it advises that the application be approved, and such certification shall be recorded in the mining cadastre registry.
(10) The [Regulating Authority] shall on the certified advice of Minerals Advisory Board confirming all prescribed criteria of this [Act][Code][Law] and of the regulations have been met, renew the licence for a period not exceeding two years.
(11) The applicant shall be notified in writing of the decision on renewal applications, and if an application is refused, the [Regulating Authority] shall give reasons for such refusal.
(12) Where the [Regulating Authority] has refused an application to renew an exploration licence that is renewable and the cause given by the [Regulating Authority] for such refusal can be remedied by the holder of the licence, if the cause has been remedied with thirty calendar days of receiving the notice under subsection (11), the licence holder may reapply for a renewal of the licence within such thirty day period.
Drawn from Sierra Leone’s mining law (2009), this provision sets the initial exploration term of four years that can be renewed twice for 3 years and 2 years respectively. This gradual reduction in term length encourages the licence holder to focus on the most prospective sites within the licenced area and to conduct its exploration program expeditiously.
Unlike Tanzania, Sierra Leone’s mining law does not provide for a retention licence. Thus, an exploration licence may be held for a maximum period of 9 years in Sierra Leone. That period is likely to be sufficient for the identification of a small to medium sized commercial deposit and completion of the requisite environmental and feasibility studies in order to progress to the exploitation phase, but the 9 year limit may be problematic for the detailed study of a complex or very large scale deposit in a challenging environment.
The article requires a mandatory reduction in size of the area to a maximum of 120 square kilometers for the first renewal that may be waived upon the requisite showing to the Minerals Advisory Board and the Regulating Authority. No further reduction of area is required for the second renewal.
Renewals are not automatic under Sierra Leone’s law. The licence holder is required to submit a detailed annual report of operations carried out and results achieved, as well as a proposed exploration work program for the requested renewal period. The renewal must be approved by the Minerals Advisory Board.
Suspension of a licence may be a temporary sanction against a licence holder or a de facto suspension of the licence term due to a force majeure event preventing the holder from conducting operations.
In the case of force majeure, the licence holder is excused from compliance with certain obligations during the reasonable duration of the event; and the term of the licence may be extended for that period. Careful attention should be given to the drafting of what constitutes a force majeure event, the related notification requirement, the obligations of the licence holder to use best efforts to overcome the