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Part B: Mineral Rights - Part B-2: Exploration - 25. Exploration Licensing | 25.4 Area

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:

Article [_]

(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).

Annotation

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:

Article [_]

(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.

Annotation

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.