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Part B: Mineral Rights - Part B-5: Development Minerals | 31. Development Minerals Exploitation Licence

Development minerals encompass a range of minerals and materials that may be mined with little or no exploration or extensive exploration as required in metals mining. For instance, building and construction minerals and materials like sand, clays and aggregates may not require exploration before they are mined, and minerals like limestone, barite, and some kaolin require exploration to determine the extent and quality of the deposit before exploitation is planned. Thus, this topic provides for cases where an exploration licence holder can upgrade to an exploitation licence upon meeting the minimum work requirements as well as cases where an applicant applies for an exploitation right at first instance without progressing from an exploration right. The latter process is particularly suitable for artisanal and small scale mining where applicants typically lack resources for exploration or consider the requirement of exploration a disincentive to formalization. In most cases, however, the minerals mined by artisanal and small scale miners do not require exploration. Countries that have sufficient geological data on development minerals may also grant exploitation rights without a prior exploration rights. In such cases, exploitation licences may require applicants to submit feasibility study reports within up to six months or a year and to commence mining operations not later than the same period.

Where sufficient geological data is available, countries may also consider using auction processes to allocate exploitation rights. Auctions are not commonly used in the mining sector because countries often do not have sufficient geo-scientific data to interest multiple bidders. Where such data is available, auctions can be used to ensure optimal allocation of mineral resources. This is particularly true of development minerals whose occurrence or deposits can be established with limited or no exploration. For auction regimes to be effective, rules and regulations must be put in place to ensure that they are transparent, objective, and competitive.